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National Press Club -

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LEADER OF THE OPPOSITION

THE HON KIM C BEAZLEY MP

ADDRESS TO THE NATIONAL PRESS CLUB

CANBERRA

15 NOVEMBER 2006

MY BLUEPRINT FOR PROSPERITY

Nobody here needs reminding there's an election twelve months from now.

It's a big decision for a nation that finds itself at a crossroads. The choices

confronting middle Australia are these:

Do we go up the high-wage, high-skill, high-tech road to prosperity. Or down

the low-wage, low-skill, low-tech road.

Do we build an economy that harnesses the talents and toil of middle

Australia. Or an economy that only benefits the few.

Do we build a broad based economy to withstand shifting global economic

forces. Or a narrow-based economy at risk once the resources boom ends.

These are simple choices between my economic vision and Mr Howard's.

That's what I want the next election to be about. About who can build the type

of nation we're proud to hand to our kids and grandkids.

So I say to John Howard: Bring on an economic election. Let's fight this

election on positive proposals for Australia's economic future. Not what

interest rates were in 1982 or 1989. But where they'll be in 2008, 2009 and

beyond.

As you know, this past fortnight I've been travelling to each corner of this

country talking with the families of middle Australia about interest rates.

Ever since interest rates were politicised in the last election campaign they've

been the dominant economic issue. And it's only fair that families want to

know their leaders are doing all they can to put downward pressure on rates.

Not just saying they can. Having a plan too. Doing the hard yards.

That's why I've been talking with families about my plans to fight inflation. And

about the pain Mr Howard's breach of trust inflicts on middle Australia.

Phil [Coorey] made an interesting point earlier this month about the Prime

Minister's shift in language. How he's ditched his defence of interest rate rises

under his watch, and is ramping up a tired old fear campaign about Labor and

the economy.

Following that, some of you wrote about the need for me to set out how I'd

manage the national economy differently to the PM. We're on the same page.

In fact it's something I think about a lot while I'm working the treadmill each

morning.

Steve [Lewis] calls it a 'manifesto'. Paul [Kelly] calls it a 'paradigm'. I'm a

creature of habit. I prefer 'Blueprint'.

And so today I want to do something unusual for an Opposition Leader. I'm

going to give a completely positive speech. All positive.

You've heard a lot from me about what John Howard has done wrong. As

time goes by you'll hear more on that too.

But today let me talk only about what I know Labor will do right. We got it

right on climate change, Iraq and skills. I laid out detailed plans, well in

advance. And I've been proved right. The ground is now shifting. As I knew it

would. I took the long term view. Pointed the way there. Prepared for it.

And I know I'll be proved right on the economy. That's why today I lay out my

Blueprint for Prosperity. A Blueprint that outlines Australia's economic future.

And my role in building it. A Blueprint for a modern, competitive economy.

And how we get there. In many ways my most important Blueprint. The one

that pulls together the Blueprints and policy announcements I've made over

the past 18 months.

Blueprints for a high-skilled workforce, world class infrastructure, cutting-edge

innovation, a 21st century fuel industry.

Blueprints for our kids and grandkids - early childhood education and kids'

health.

Blueprints for the long term challenges - climate change and national security.

A MODERN, COMPETITIVE ECONOMY

I believe there's an open road to future prosperity for Australia. A high-skill,

high-wage, high-tech road.

This is my vision for a modern, competitive economy that takes on the world,

and wins:

An economy reformed, to harness the talents and toil of everyone who

participates in it.

An economy reformed, to get productivity growth back on track.

An economy reformed, to put downward pressure on interest rates.

An economy reformed, to pay our way in the world, not pile up foreign debt for

future generations.

In short, an economy that rewards the families of middle Australia for their

efforts. So when they put in, they get back.

I believe Australia has great potential and a great future ahead. So let's take

the high road. That's the point of my Prosperity Blueprint.

Let's not give in to a passive, pessimistic view that Australia has no choices

about its future.

Let's not go down the low-wage, low-skill road as the only way to compete

with China and India.

Let's not see commodities as Australia's only toehold in the global economy.

Let's not just become a branch office economy with outposts of companies

based in New York, London, Mumbai or Shanghai.

I believe that we can build this high-skill, high-wage, high-tech economy.

I believe we can grow exports and achieve ongoing trade surpluses.

I believe there is a future for Australian manufacturers. As an exporter and

innovator. Competing in global markets.

Understand this: I'm a multilateral free trader. I don't believe there are any

short cuts. There's no future in protecting producers from global markets. But

there is a strong future in beating competitors in global markets.

This is what a modern, competitive economy looks like:

Broad based. Cities and regions. East and West. Resources, manufacturing,

services. Commodities and technology. Investing in the world, and welcoming

investment here. Producing goods and services the world wants to buy. An

open, confident, competitive modern economy. High-skilled, high-wage jobs

for our kids. I know there's hard work ahead to make Australia competitive

again.

Australia does need a new direction. New economic policies. Policies that put

their faith not in the uncertain swings of global commodities markets, but in

the certain abilities of Australians.

MEETING THE TWIN CHALLENGES

So my Prosperity Blueprint has this at its core:

A sustained focus on the twin challenges of lifting productivity and

participation.

A sustained focus on nation building and reward for effort.

To address urgent national challenges.

Drawing on the past two years, Blueprint after Blueprint, policy after policy.

Let me spell out why I believe those are our twin challenges.

There are really only three ways to build prosperity: work smarter, work longer

and get more people into work.

Well, middle Australia is already working among the longest hours in the

industrialised world. The time squeeze on families is already intense. Longer

work hours just aren't an acceptable option.

Instead, we've got to work smarter - that's productivity. And get more people

in work - that's participation.

First, productivity.

You can sum up my plan for productivity in two words: nation building.

It's the key to stepping up to the next level of growth and prosperity. Making

Australia competitive again. Growing exports. And getting the half trillion dollar

foreign debt under control.

Productivity simply means getting more done without working more hours. In

other words, working smarter. Better skills, technology, infrastructure.

That's why I've had so much to say about training, innovation, broadband,

collective enterprise bargaining and national infrastructure priorities. Because

they're the nation building productivity solutions. They can drive Australia's

productivity growth forward. I don't underestimate the challenge. Yet I believe

we can do it.

The US economy is the global benchmark for productivity. Australia's

productivity rose from 79 per cent of US productivity rates in 1983 to 86 per

cent by 1998. Today we're back to 79 per cent of US productivity levels. Back

where Australia was in 1983.

But I believe we can turn it around again. With nation building strategies in

place, we can get productivity growth back on track.

The second of the twin challenges is lifting workforce participation.

You can sum up my plan for participation in three words: Reward For Effort.

My Pact with Middle Australia is focused on lifting participation. Making sure

that when Australians put in, they get back.

Participation is about inclusion. A broad based economy with broad based

benefits. A society where everyone who can work, does work.

Removing barriers to participation in work and society. Making participation

worthwhile. Providing incentives where needed.

This will be an increasing challenge with an ageing population and rising

chronic disease rates.

Comparisons between Australia and other nations show Australia could

achieve much higher participation rates than we have now. Among mums.

Among indigenous Australians and the low skilled.

We can do better than having more than two million Australians of working

age on income support payments. A number that's barely changed in 10

years.

We can do better than 600,000 Australians with casual or part time work but

wanting more.

That's why I've had a lot to say about the participation solution: Rewarding

Australians for effort. Making hard work worth it.

Like the Pact with Middle Australia I announced during Budget week. Policies

that reward people for participating in our economy. At the real life family

level, investing in childcare, skills and broadband.

Workplace rules that are family friendly and help them cope with the time

crunch. Strategies to tackle chronic health problems. Opening the gates to

TAFE colleges for our kids. Saying no to welfare rules that just don't work.

THE BLUEPRINT

So today I want to flesh out how the Government I lead will take on the twin

challenges of lifting productivity and participation.

Let me be specific about six of Labor's nation building policies that will get

productivity growth back on track.

1. Teach and train Australians

First: Better trained workers are more productive workers.

That's why I've laid out plans to invest in the next generation of Australian

workers - by teaching and training Australians.

I will raise productivity by attracting more young Australians into traditional

trades training. My Government will contribute $800 per year to a

personalised skills account, to pay their TAFE fees.

I will lift apprenticeship completion rates by giving trainees a cash bonus at

the half way mark and at completion of their training.

I will lift education standards, with higher pay for teachers who meet national

quality standards.

And I'll give universities the freedom to diversify and pursue higher standards,

plus a strong Commonwealth/State Higher Education Quality Agency.

2. Collective enterprise bargaining

Second: Cooperative workplaces are productive workplaces.

That's why I will build a modern, flexible and fair industrial relations system. A

system based on collective bargaining that delivers higher productivity growth.

Experience in Australia and other countries has shown collective enterprise

bargaining achieves higher productivity and wage outcomes than individual

contracts.

And because it's based on productivity growth, it doesn't put upward pressure

on inflation and interest rates.

Collective enterprise bargaining is the way of the future. Collective

agreements can provide for performance pay, individual rewards and flexibility

upwards. They give employers and employees the right incentives - to work

together to find ways to lift productivity and share the gains in profits and pay.

And that's why I'll make the right to collective bargaining the foundation of my

modern, flexible and fair industrial relations system.

3. National infrastructure

Third: Advanced infrastructure helps work get done faster.

We will do things better and sooner if Australians are not held back by

crumbling infrastructure like congested roads and ports, and slow

communications networks.

I will raise productivity by providing national leadership on infrastructure.

Leadership that the business community has been crying out for.

I'll establish a peak national agency called Infrastructure Australia - to audit

our infrastructure needs, set priorities and get projects on the move.

Broadband will top our infrastructure priorities, because broadband internet

connections will drive thousands of productivity applications for businesses

around Australia.

I'll build a super-fast national broadband network to 98 per cent of Australians'

homes, delivering speeds up to 25 times faster than what's available now.

4. Kick-starting business innovation

Fourth: Innovative businesses are the most productive businesses.

Innovation involves new products and services, and new ways of creating and

marketing them. Sometimes it involves big breakthroughs. Other times,

incremental improvements.

The new era of business innovation must be led by business.

That's why I will create up to 200 Knowledge Transfer Partnerships, a high

powered 'buddy' system for putting new science graduates in business.

And I'll establish up to 10 new Enterprise Connect innovation centres around

the nation. Centres that will build bridges from businesses to ground-breaking

research. With the first two centres focused on health research and advanced

manufacturing.

And it's why I'm looking at increasing incentives for private sector research by

overhauling the R&D tax concession.

5. Climate change

Fifth: In a carbon-constrained world, productivity will increasingly be driven by

energy efficiency.

The way to increase energy efficiency is through a market for carbon

emissions trading that will drive the creation and uptake of new carbon-

friendly technologies like clean coal and renewables.

Already that emissions trading market is worth more than $22 billion. Its value

growing at over 100 per cent per year. In time, it will be worth trillions. And we

should be a part of it.

But we must sign up to Kyoto to get these benefits. Not be locked out. Not

least because, as the Climate Institute has shown, our farmers could earn $2

billion in the market's first five years in Australia.

We know that climate change is one of the greatest threats to our kids' future.

If we act now, we can still be a leader of the trillion dollar carbon-friendly

industries emerging globally. And we can avoid the economic disruption that

climate change threatens to bring.

6. Health Reform

Sixth: Microeconomic reform in the health sector will help raise national

productivity.

Health care makes up for almost one in every $10 spent in our economy. The

health sector is important not just because it contributes to population well-

being, but because it is one of the largest parts of the economy.

To drive productivity improvements, I will address the cost shifting and

duplication between the Commonwealth and States in the next round of

Health Care Agreements in 2008.

I will also improve the integration of private hospitals in the health system, and

consider a shift to a single public funder for the health sector.

Now let me turn to five of Labor's key policies to reward effort and increase

workforce participation.

1. Teach and train Australians

First: Individuals who have more skills and training participate more fully in

work throughout their lives.

I'll give kids skills-based training early in their school years, through the trades

taster program, increased school-based apprenticeships and the choice of a

specialist trades high school.

I'll lift participation in training by effectively getting rid of TAFE fees on trades

and childcare courses. And I will reform the apprenticeship system so it

provides a genuine broad skills base that sets young Australians up with a

skills foundation for life.

2. Family-friendly industrial relations

Second: Mums and dads will participate more fully if industrial relations laws

are balanced, not always one-sided in favour of the boss.

I will give families reasonable protection from unfair dismissals, unsocial work

hours and rosters that can be changed at the whim of a boss with no

reasonable notice.

And I will abolish restrictions that discourage employers and employees from

negotiating family-friendly workplace arrangements.

3. Early childhood

Third: Australia won't lift workforce participation unless families can get

affordable childcare.

I will help build 260 childcare centres at primary school sites and at

community facilities. For thousands of parents, that will end the dreaded

'double drop-off' of battling through peak hour traffic to drop off one child at

child care and the other at school.

I will address the shortage of childcare workers by providing individual skills

accounts for students enrolled in early childhood courses, effectively getting

rid of TAFE fees for those students.

And I will lift national childcare quality standards. So mums and dads can

know that childcare is never just babysitting, it's the beginning of a child's

education.

4. Kids' health

Fourth: I will tackle one of tomorrow's major threats to workforce participation

rates - the impending epidemic of chronic disease in our working age

population.

Experts warn us that without preventive action now, chronic disease rates will

become far worse in the future.

That's why Labor is committed to specific targets. For our kids' health,

including screening of all newborn babies. For a national childhood obesity

campaign with practical measures in schools, at home and in the community.

And for a fresh approach to tackling mental health problems, suicide and

substance abuse among young people.

5. Work incentives

Fifth: Australians won't work more while the tax and welfare systems slug

them for working harder.

I will tackle the work disincentives that result from the high effective marginal

tax rates. By addressing these high EMTRs, we can restore the connection

between reward and effort. As well as restoring incentive for skill formation.

My priority is to improve incentives through the tax system, recognising that

these reforms cannot be achieved overnight.

But in the longer term, we should strive for the objective that no individual

faces an average effective marginal tax rate of more than 50 cents in the

dollar over a reasonable income range.

This Prosperity Blueprint provides us with a substantial agenda. It is

ambitious. Because there aren't short cuts on the road to prosperity. No short

cuts on the high-skill, high-wage, high-tech road.

And there are many more challenges to tackle. Like raising national savings.

And firing up our enterprising small businesses.

My government will have the fiscal discipline to implement the Prosperity

Blueprint within clear Budget Rules.

We can never relax from fiscal discipline and spending restraint, even during

the current flood of tax revenues from the resources boom.

I've been around long enough to know these conditions won't last. Tough

Budget conditions will return. And we've got to be ready for them.

That's why we've laid down Labor's strict Budget Rules. A commitment to

keep the budget in surplus over the cycle, and not to increase taxes as a

share of our economy.

Our spending priorities will be shaped by our reform priorities. Every one of

Labor's spending decisions will be subject to these conditions - surplus

budgets and no increase in the overall tax burden. That means we'll keep

spending on a short leash.

To deliver my Prosperity Blueprint, I'll get the best advice from within

government, from experts and from my Council of Business Advisers.

Implementing the Prosperity Blueprint means a new era of

Commonwealth/State relations. Future thinking, not finger pointing. A Modern

Federalism.

I'll hold State and Territory governments accountable for achieving outcomes.

Outcomes that will be independently reviewed.

What it really means is the right incentives to get better results. Cleaner lines

of responsibility and accountability.

I'll use this reform framework and the full authority of the Prime Ministership to

implement my Prosperity Blueprint.

ECONOMIC ASPIRATIONS

Now let me be even more specific about my aspirations for our economy.

I've outlined my high-skill, high-wage, high-tech vision. I've identified the twin

challenges to reach this vision. I've described the policies to achieve this

vision.

Now let me be specific about two key goals:

First, I will reverse the decline in Australia's productivity growth benchmarked

against the US. We'll get there by achieving goals like lifting Australia into the

world's top 10 nations for take-up of high speed internet. And goals like

halving the number of occupations listed on the national skills shortage list.

Second, I will lift the participation rate for 'prime age' Australians - people

between 25 and 54. So we're above the OECD median - not stuck in the

bottom ten nations, as we are now.

We'll get there by achieving goals like ensuring every community that has a

chronic childcare shortage will have a new childcare centre built at primary

schools or on community lands.

And goals like getting an extra 110,000 young Australians into traditional trade

apprenticeships in the next decade, by lifting commencements by 3 per cent

every year.

I will be accountable for achieving these goals.

At the election, middle Australia can judge me on my plans for the economy.

After the election, they can judge me on whether we put together the building

blocks of future prosperity.

POSITIVE PLANS

Thanks for giving me this opportunity to outline my Blueprint for Prosperity.

Let me finish on this note. I believe the election shouldn't be about fear

campaigns, and lowest common denominator politics.

It shouldn't be about fear of other religions, as we have reason to expect.

It shouldn't be about fear of imaginary union power, as is surely planned.

It shouldn't be about the past. Seventeen per cent rates 17 years ago, or 22

per cent rates 24 years ago.

We all have a role to play here. You and I both. You by not falling for the

dusted-off campaign manual of elections past. Me by proposing good policies,

like those today, for tomorrow's prosperity.

With the Prosperity Blueprint I've just outlined, you can see I'm not waiting for

government to fall into my lap. I'm working hard on this positive agenda, and

explaining it to middle Australia.

Together we can ensure the campaign's about the real choices Australians

face - the choices I outlined in my opening remarks today.

About concrete plans to build an economy that works for middle Australia.

About who can build a modern, competitive economy.

About who can take Australia up the high-skill, high-wage, high-tech road to

prosperity.

About who can build the type of nation we're proud to hand to our kids and

grandkids.

I'm making the case for change. I've got the plan. A foundation I will continue

to build upon in the coming months. Twelve months from now, I won't just be

talking about a modern, competitive economy. I'll be building one.

Thanks.

Thank you very much, Kim Beazley. We have our normal period of questions beginning with Michael
Maddagan.

JOURNALIST: The latest Newspoll shows a 4 per cent drop in Labor's primary support and the
Coalition seems to be honing in on key Labor strengths such as education and health. In terms of
the next Federal election, a pivotal state like Queensland is undergoing an almost historic
economic boom. I think a lot of workers there would see themselves as being on the high-wage,
high-skill, high-tech road to prosperity. How do you reconcile these sorts of realities with your
optimism about becoming the next Prime Minister?

BEAZLEY: Well as you know, because I've managed to sustain this discipline for a considerable
period of time, I don't discuss the ins and outs of polls, except to make one statement. One clear
statement on them which I've been able to make for the course of the last six months and that is
we're competitive. In the midst of what has been the most substantial economic boom I can
recollect, the Labor Party is competitive. This is question you should actually be directing to Mr
Howard. Why when you have this best set of Australian numbers and this huge flow of money has been
coming into your coffers and you've been spending it on consumption and not investment endlessly,
election after election - aren't you doing better? That would be a very reasonable question to ask
of Mr Howard.

I'll tell you what my approach is, it's not to worry about the polls. It's to worry about the
people. And the only polling I do is in my very frequent visits around shopping centres and to
places where our good middle Australians foregather and to listen to them about what their
priorities are and to make clear what mine are. I've got to say, wherever I go, there are people
now saying to me in greater and greater numbers, you've got to win the next election.

Mostly, when they say that, they talk then about industrial relations, but they do talk about other
things. They feel betrayed on interest rates. They're deeply worried about global warming. They're
deeply worried about Iraq. They're worried about water. These are the sorts of things they're
raising with me. Some of them even are worried about skills. Some of these issues we have driven
for a very considerable period of time and maybe they're heeding them for the first time. But all
of them are absolutely essential for this country.

JOURNALIST: To be able to achieve your blueprint for economic prosperity, you'll need a lack of
distractions and one of them at the moment is the various developments in the State Governments. I
was just wondering, for the record, whether you could clarify for us how many fundraisers organised
by Brian Burke and Julian Grill that you've attended or spoken at? And also given that the West
Australian Attorney-General has indicated that there were phone-taps running for about 12 months,
is there anything that you need to be worried about in your conversations with the people who've
been tapped and bugged?

BEAZLEY: No, on the second question. On the first question, I speak at stacks of Labor Party
fundraisers, stacks and stacks of them. In some of them no question at all, Brian Burke would have
been assisting people who were organising those fundraisers. But I'll tell you one thing about them
all. All of them are Labor Party fundraisers, all of them are properly declared in relation to the
way in which the Labor Party must declare their funds.

One of them appearing in the paper today, I noticed, was a fundraiser at which Brian Burke was not
present, at which Geoff Gallop was, and at which a number of Ministers were and at which I spoke.
Unfortunately the paper knew that, but didn't see fit to print it. The second point I would make
about it is this: Look through life, through your childhood, through your time in education
systems, through your experience in the workplace, you build up lots of friends. One of the
friends, and indeed his dad was my father's best man at their wedding, one of the friends is Brian
Burke.

However, I take this view, when you are Prime Minister of this nation you govern dispassionately
for all the people. You have no friends to have favours done them. No friends. Not friends in good
odour or bad odour - none. You govern for the Australian people and no one else. That is your
obligation and that is what I would take seriously as Prime Minister of this nation.

JOURNALIST: A quick double-barrelled question if I may. Firstly, do you support Rupert Murdoch's
plea to Australians to avoid irrational anti-Americanism regardless of what might happen in the
short or medium term in Iraq? And secondly, this week we've seen the Prime Minister engage in some,
I think, trade-mark political agility on the environment, producing the surprising headline Howard
- I'll lead on Greenhouse. Given that propensity, and given the rising tide against the involvement
in Iraq and the United States, and the fact that that tide will reach our shores, probably, next
year, do you fear that you might one day soon see a headline that says Howard - I'll lead on
retreat' and we'll have troops out before October, robbing you of an election issue?

BEAZLEY: I always thought there is a sort of similarity between my opponent and the Duke of
Plaza-Toro, but I'll leave that to one side and let you work out the poem. But on the first thing,
yes I've listened to Rupert Murdoch's speech very carefully last night and there is very little I
would find to disagree with it. And in particular I agree with the point that he was making:
Australians need to move aside from any of the immediate issues that confront us. Our views, one
way or another on any particular American administration, our views on the particular conflict in
Iraq.

We have an alliance that has lasted for more than 50 years and it's got to be sustainable for a
long time into the future. You have to be an effective participant in that alliance and part of
being an effective participant is being able to sit down with your friend and telling him when you
think he's doing something wrong, as well as assisting him when you think he's doing something
right.

Rupert Murdoch's speech was superb. It was a clarion call in a very important occasion to the
Australian people in the context of what is a very substantial study centre which has been put in
place, which by the way the Labor Party supports - a very substantial study centre. Then we had the
Prime Minister, and what we got was the opposite, what we got from the Prime Minister was not
advancing the position of the American alliance amongst the Australian people. But a craven call
for political support for himself in the direction he had chosen to go. We had a Statesman and we
had a politician and unfortunately the politician was the one being paid to be a Statesman.

Now on the second of your propositions - agility. The more you dance about, over a decade's worth
in government, the more people notice that's what you're doing. Nobody takes John Howard seriously
on the climate - no one. Everybody knows he's a climate sceptic, everyone knows that. Everyone in
the media knows that. I mean the wry looks around the place on the part of journalists and the wry
way in which the stories have been written today, they know the bloke doesn't mean it and they know
the bloke can't do it.

I've got to tell you this, if you can do all the things that I've been talking about in terms of
being an emissions trader, in terms of taking advantage of the fact that for our industry and
research institutions, the issues related to climate change. If you don't ratify Kyoto you are not
in it. You can say all you like about the fact that you'll now - having mocked me, and abused me in
Parliament, day in, day out, for being in favour of an emissions trading system - and now going in
and saying you're going to do it now. You can forget about all of this, unless we're there at the
top table. There is only one way to be at the top table and that is to ratify Kyoto. Everything
else is just frippery. You've got to get in there and I don't think, on this or any of the other
back-flips that the Prime Minister will no doubt perform in the next little while, there's any
level of trust there now for the bloke. There will be a great deal of cynicism.

JOURNALIST: On Monday in a speech in Ballarat you criticised the Victorian Liberal Leader, Ted
Ballieu, for having being the Liberal Party's President when the Liberals closed 326 schools. You
said of him and I quote: "Can you believe he still thinks they did a good job, how out of touch".
Those 326 schools were out of the Government sector in Victoria of 1,606. The ACT Chief Minister,
Jon Stanhope, has plans on the books to close 39 schools out of a total government sector of 167.
Mr Ballieu's percentage is 20, Mr Stanhope's is 23. How much more out of touch is your Labor
colleague than your Liberal opponent and how does the Stanhope plan square with your oft stated
ambition to be the Education Prime Minister?

BEAZLEY: As far as Mr Stanhope is concerned, he would take the view he's actually got to fill the
schools that you have to have kids there and kids there in enough numbers to make sure that they
work properly. There were an awful lot of filled schools in the case of Jeff Kennett which were
shut down and an awful lot of transitioning, if you like, encouragement across to the private
sector.

I trust a Labor Government on these issues. I don't trust Liberals. The Labor Party believes in a
strong public sector - that's an article of faith with us. When we're restructuring schools like
that, we are restructuring them because we believe we have an educational purpose to be served.
Kennett was doing that in order to make an ideological point about the way in which he wanted to
lead Victoria. Two totally different motives, therefore two totally different outcomes likely.

JOURNALIST: Back on Brian Burke, how many times have you spoken to Brian Burke or met him since
returning as Labor Leader? And secondly, given the collateral damage that he's causing the Labor
brand, isn't it about time that you closed the door on your friendship with him?

BEAZLEY: Can I just say firstly, in the last six months I think I've spoken to Brian a couple of
times. I cannot think of any occasion over the course the last 18 months, as I search my memory, in
which I've ever discussed with him his business interests. When we talk, we talk about family. We
talk about politics in the very general sense. In recent times I haven't had much occasion either
to meet with him or see him. I don't want to say, by saying that, say that I walked away from him
or something. I didn't.

But it just happens to be the case when you've got a job like mine, your friends go on a very, very
long finger. They're right at the back of the queue of people you talk to. So, the truth is, I've
hardly seen him, I've hardly spoken to him over the last 18 months.

I think that it is prudent to do what Alan Carpenter is doing and I support him on it even though
it involves dealing harshly with a friend of mine. In the circumstances in which we find ourselves
now, prudence and that criteria I established in my answer to the previous question, would be if
you are going to be able to convey yourself as a man or woman for that matter, in the case of
Cabinet Ministers, without fear or favour, you must act in a way that is consistent with that.

So, we will not be receiving from Brian Burke any propositions related to business interests that
he intends to pursue. And I would want to act in a way that ensured that Australian people
understood, not only with him, but with all of my friends - and there lots of then - I'm going to
pursue the policies of the interests of the people of Australia, irrespective of whatever my
friends might feel from time to time. Sometimes that breaks your heart. But it has to be done.

JOURNALIST: On Iraq, you've said that in Government you will withdraw Australian troops and not
necessarily in conjunction with a withdrawal by the United States, Britain or other Coalition
partners. Given that the Iraq conflict now is primarily Arab killing Arab, how would the withdrawal
of Australian troops, indeed of American troops, improve the security of Iraqis?

BEAZLEY: We've got to look at this at many different levels. Bit I just say this: The first thing
you have to do is emphatically get in your mind, at the back of your mind, if you happen to be a
Statesman or woman, running your county at this point of time, an understanding of this simple
fact: Our involvement in Iraq has made us less safe. That's the first point.

In terms of the interests of the western nations, our individual societies and people are less
safe. In terms of the global struggle with Islamic fundamentalist terrorism we have given them a
whole series of free kicks at goal. And while-ever we persist there that continues to be the case,
as our policy is bogged down on, particularly American policy, drawn into the vortex of this
conflict.

So, what does that mean? That means your objective must be to extract yourself from this situation.
And whenever you start to get into arguments or discussions about what are, you know, this or that
potential consequence, always remember the ultimate objective, free yourself of that burden. Get
yourself back on track. So, we have to look not only at the interests of the Iraqi people,
important though they are and we have to be concerned about that, we have to look too at our
interests and we have to look to the interests of the people of the United States and the
Government of the United States.

I think it is obviously the case, as you mentioned in your question, you're quite right. Vastly
now, the struggle going on in Iraq is a classic civil war, a classic confessional dispute between
different sides of Islamic religion. And the role that we can usefully play in that, apart from
getting in the way, is negligible. These are issues which ultimately must be solved by the Iraqi
people and the Iraqi Government and they must be given every incentive, encouragement and prodding
to arrive at a conclusion themselves.

And while-ever the American, the British or us are in a position to enable them to avoid at
arriving at a political compromise, by being able to be inserted into a conflict situation, you
reduce, you reduce the capacities for them to arrive at a conclusion.

I heard John Howard last night and I expected it of him, he's a cynical politician, but what he was
saying last night was just months if not years out of date. The United States and Britain are
repositioning. What John Howard's rhetoric ought to be doing, not just simply for domestic
political purposes but for the purposes of creating an atmosphere intellectually internationally,
what his rhetoric must be doing is preparing the ground for what might be described as a
sub-optimal conclusion to this conflict. And he is so far from that. He's not a very useful ally of
the United States whether he is the ally now that President Bush wants.

JOURNALIST: Mr Beazley, there's a lot of speculation going around about a pre-election reshuffle on
both sides of politics, even a pre-Christmas reshuffle. What do you think the chances are of there
being a Ministerial reshuffle or a frontbench reshuffle on either side and can you give Bob
Sercombe and Gavan O'Connor a guarantee that they'll still be on your frontbench in the lead-up to
the election?

BEAZLEY: I can give a very good forecast that I think I can guarantee there'll be a reshuffle by
the Government. And they're obviously headed down that road as John Howard erects further barriers
in his defences against any potential assault by Peter Costello. So, we can guarantee that various
people will be promoted with at least half that in mind on the part of the Prime Minister.

I have a different view. It actually helps the Government to freshen itself up from time to time.
Now I just state that as a sort of theoretical assumption about how governments operate, so I'd
expect, on those grounds too, a reshuffle. It doesn't help Oppositions. Oppositions have a
different task. Oppositions have to establish credibility and there is only one way many times an
Opposition can establish credibility at the personnel level. It's got do with the policy level,
I've been talking about that. But at the personnel level and that's longevity. You actually have to
keep people in place for a considerable period of time. You see, when we come to fight this
election campaign, one of their attacks on us will be in regard to experience. It's an easy attack
to make on Opposition, you're not in Government therefore, you can make an attack on the basis of
experience.

I'm a very hard person to attack on the basis of experience. I've been around a long time, as a
Minister for a very long time and as Leader for a long time. I'm pretty iron-clad when it comes to
an argument about experience. However, a lot of my frontbenchers have not been Ministers. So, what
can they get? They can get one thing only. They can say for three, five, six years, I've been
Shadowing these portfolios, I've been reading myself into them. I've been talking to the people who
are the players external to Government, I've been getting my leaks and my discussions with people
who are in the Government. Therefore, I don't believe that reshuffles help us or would help me.

I do believe this though about frontbenchers and backbenchers. I have frequently said this to my
Caucus and colleagues: Every single one of them are responsible for victory at the next election.
Apart from myself, and Jenny Macklin and Chris Evans, they're all paid the same, whether they are
frontbenchers or backbenchers. Each one of them has a responsibility for the victory - every one of
them. And none of them have the right to hand over to somebody because they've got a title, the
function of being responsible for the campaign.

You know the great thing about my Caucus? It's actually doing it. Now, I get as much out of the
backbench committees that are going around the place now campaigning under the radar as I do out of
frontbenchers. It's a good thing, it keeps people fighting.

And that goes for people who are leaving Parliament as well as people who want to stay on in
Parliament and people who want to come into Parliament. And I value what it is that I get from both
Bob and Gavan. So, I would look forward to their continued participation. Any of you had anything
to do with South Pacific affairs, you'll now what a fanatic Serco is. If any of you are concerned
about real factual detail on what is actually happening on the ground in this shocking drought that
we are confronting, I suggest you ring Gavan. You'll get a better answer out of him than you will
out of any Liberal Minister.

JOURNALIST: Mr Beazley, the Government will soon consider the future of wheat marketing. Could you
outline your policy on the Single Desk and the question of AWB's monopoly and if, by some chance,
AWB's monopoly survives the Government's review, would you, in government, remove it?

BEAZLEY: One of the things we've made very clear to the farmers, who are not a noted group as
strong Labor voters or Labor supporters, but nevertheless are beloved of us and about whom we are
concerned, that we are prepared to listen to what they have to say about things like single desks.
We will be guided by what they have to say.

We note this about Australian farmers. They confront a world in which Americans, Europeans and
others, lever like blazes to get themselves into markets to trump Australians on the way through.
There a right way and a wrong way of dealing with that. The wrong way of dealing with that is to do
what AWB did. The right way of dealing with that might be to listen to them on the question of that
Single Desk when they're in an international environment in which they'd want to see a bit of
action from the Americans and Europeans on the subsidies that they put in place.

So, we will listen carefully to the farmers on that. Obviously, we'll see what the Government does
with regard to AWB.

One of the things I resent very much as a political figure at the moment in this country is the way
in which the Government has scapegoated AWB. I don't believe those AWB executives considered they
were operating in any set of circumstances other than that they had a Government blind eye or
shrugged shoulder turned to them. And I think that this Government has skated on thin ice and has
got away with its own culpability by giving inadequate terms of reference to the Cole Royal
Commission.

There is no question in my mind when you look around the States now and you see Labor Minister
after Labor Minister being sacked for this or that peccadillo - and I accept those related to
criminal offences in relation to child molestation - but for the rest of the people that we've been
talking to, you see, honest Labor Governments making Labor Ministers pay a penalty for actions
which are not one tenth as damaging to public probity and public interest than has been made by the
way in which the Government has dealt with AWB. It's sickening. And frankly, this Government ought
to stand condemned for the fact that not a Minister has gone, from this the worst scandal in my
lifetime, in Federal politics.

JOURNALIST: Mr Beazley, despite any general disappointment at yesterday's High Court decision, are
you looking forward to inheriting the framework for a national IR system, and from that point, you
can add your own details to it, but rather than having duplicated State systems?

BEAZLEY: I'm a Western Australian, mate, but there are certain things about your origins which you
can never abandon. I am a federalist. I am a federalist - pure and simple. Always have been, always
believed that an awful lot of good services get delivered at a local level and that at a federal
level, if you try to deliver them, you're over-bureaucratised. So, as a general proposition, I'm
for collaborative models in relation to the States, not to diktat.

However, I make one thing absolutely clear, and that's this. We will use the full powers available
to us as determined by the High Court, to ensure people get justice, and we'll build a modern, fair
and flexible industrial relations system at the national level. That will include access to a
decent umpire able to preside over good faith bargaining. It'll be weighted in favour of collective
bargaining. It'll give people access to a decent amount of protection in the case of unfair
dismissal. It'll give people access to a right to be represented by a union. We will use the full
powers that are available to us to ensure that.

We will still confront State systems. Whatever the High Court did in shifting the balance in favour
of the Commonwealth yesterday, and they shifted it quite a bit, it didn't eliminate the existence
of State systems. They will still continue. My determination is not to resolve any issues that
emerge from that by dictation, but to sit down and harmonise our relationships with the States
based on that. We will want to consult all players when it comes to jurisdictional issues - unions,
businesses - we'll want to discuss it with all of them and the States and we will resolve those
issues by agreement, not by belting people around.

Howard's belted middle Australia with his industrial laws and he wants to belt the States as well.
I'm not in the business of belting either but enhancing both.

JOURNALIST: You seem to have ruled out a reshuffle before the next election on the argument that it
won't freshen your frontbench. Isn't it almost impossible not to say that going to the election
with two frontbenchers who will not be in your team after the election, who will not be Ministers,
won't be less fresh than perhaps Peter Garrett on the frontbench?

BEAZLEY: Thanks for your concern, Dennis. It's deeply appreciated. I might change my mind on that
if I thought I'd get a regularly good column. But you have your proprieties as well.

Can I just say on that, look, we don't have a problem with freshness. Most Oppositions don't have
problems with freshness. What we have a problem with, what Oppositions always have difficulty with
is the sort of ballast that you get, and you can only get really, with either being in government
or starting to be a household name.

Now, Peter Garrett is terrific. He's doing an enormous amount of good for us. Most of the good he's
doing is actually under the radar. And you ought to be aware of how much he's doing so some of you
might lift him above the radar a bit by following him around and seeing it, because he's very much
in demand.

A lot of my backbenchers, actually, are in demand. He happens to be a Parliamentary Secretary, but
there are some who aren't even Parliamentary Secretaries.

I do notice this. John Howard, has, in the past, taken a couple of Ministers who've not been
preselected and who're not standing - and Shadow Ministers, both Ministers and Shadow Ministers -
into the election campaign even though, from the point of view of yourselves, you might ask
questions as to what that means subsequently in policy and personnel terms. It's been no
disadvantage to him and it would be no disadvantage to me.

JOURNALIST: As a keen observer of American politics, I'm just wondering on the referendum on the
Iraq war, do you seen any other shifts in the American election thinking that would apply to
Australian politics?

BEAZLEY: There's an ideological shift back to the centre. It is true - and it's not very easy to
define, and journalists write about it all the time and try to understand it and every now and then
in politics, those of us in politics try to do the same. I think there is a growing sense in which
what was a Republican strategy, a strategy adopted quite heavily by this Government, of finding the
hardest line positions that actually suit the wedges that you want to build into the political
system, the attacks you want to make on your opponents, to get that into place and fight off what
is called 'wedge politics' - that is basically putting your opponent on the back foot by some
argument that you might want to make by scapegoating another community - this sort of thing. That's
run out in the United States, run out badly. What the American voters seemed to be doing was moving
back towards the centre.

It's got to be said, the Democrats also moved to the centre. The Democrats engaged many more
centrist candidates than they had in the past. And so you've had the interesting position of the
Democrats moving to the centre. Many of the Republicans who lost because they were on the margins
actually were moderate Republicans. And the Republicans now are the substantial problem. They've
been pushed out strategically and, in personnel terms, to the right and the Democrats now occupy
the centre ground.

What does it mean for us? I actually think a similar mental shift is taking place in this country
now. I think this country is much less interested in what John Howard likes to talk about -
chucking kids overboard, you know, tee off on the Islamic community, all this sort of stuff that
John Howard loves to do. I think this country actually thinks we now confront a very serious
problem with fairness in our industrial relations system; a very serious problem with climate
change; a very serious problem with extracting ourselves from the war in Iraq; and a very serious
problem with giving our kids the opportunity to have the skills they need, and so on.

I think that middle Australia is now developing a different agenda in the same way as middle US.
So, undoubtedly Iraq was the biggest issue in American politics, but there are lots of others as
well.

JOURNALIST: Sorry to harp on it, but Brian Burke's friendship. Have you actually heard the tapes
and read the transcripts of Brian speaking to his other close friend, Norm Marlborough, secret
phone conversations, in Parliament answering questions, trying to get appointments into his
portfolio? And how do you reconcile that kind of behaviour with your close friend, Brian Burke, and
your other friend, Norm Marlborough? And more than break you heart to break contact with Mr Burke,
shouldn't the alternate Prime Minister be maybe more choosy about his friends?

BEAZLEY: Obviously, you have to be careful in any conversation you have with anyone. And I've got
to say that I found those transcripts deeply disappointing and very surprising, dreadful, awful.
And I can understand that when you read transcripts like that that you would act as Alan Carpenter
does and, therefore, so do I. That is why I have stated quite clearly, along with Alan Carpenter,
that in the case of Mr Burke, there can be no business discussions with him about any matter
related to his interests, or probably much more broadly than that, as well. As I said, those tapes
were deeply concerning and do not reflect the conversations that I can ever recollect with Brian
Burke. But they certainly don't reflect well on the participants in that conversation at all, hence
put in action the terms that we would pursue the course that Alan Carpenter has pursued.

JOURNALIST: I just want to nail this once and for all, and it follows up on Matt's question. As
Opposition Leader or Prime Minister, would you ever take or make a phone call to Brian Burke again?

BEAZLEY: I would never discuss business interests with Brian Burke. I would not discuss anything
with Brian while he's the subject of investigation in the way in which he is now the subject of an
investigation. And I will not review that situation until that had been concluded in all its
ramifications.