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rocked by the US financial crisis, The Australian economy still being

while the Rudd Government continues

to struggle with a hostile Senate -

a lot of action there this week.

Joining us for our regular political debate, Finance Minister Joining us for our regular Friday

Lindsay Tanner and shadow assistant

treasurer Tony Smith.

Obviously the big story today is

the fact that this bailout planned

by George Bush has not been greeted by George Bush has not been

so well, and ironically, I guess,

the Republicans are assuming a

blocking role here - at least for a

while. What are your thoughts on

that? It's got to impact on

Australia. Well, look - it's in

everyone's interests that there

beep bee some unity on the issue in

America, of course, and we've made

that point. Events are movings as

we speak, quite obviously. But

Australia's got good regulations in

place, and the previous government

ensured that. We're not going to be

immune from all of the fallout. We

know that. The important thing is

for Kevin Rudd to focus on the

issues back here in Australia -

that's the point we've been making

all week. And what he's really done

is try to reinvent his trip to the

UN. He went to the UN to give a

speech to the United Nations. He

didn't go there with the purpose of

speaking to the regulators, as he'd

try and make us all believe now. In

fact, if he wanted to speak to the

US Treasury and the US Federal

Reserve, he won't find them in New York

York - they're in Washington. Tony

Smith, we're going to take a Smith, we're going to take a break

here because, to be fair, Lindsay

Tanner has had a technical problem Tanner has had a technical

at his end. Sure. We want to try

and find some equal time for him,

as you'd expect. We'll take a quick

break. Stay with us, please. Hope

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This program is captioned live.

Once again, our apologies for the

technical details there. We have

managed to overcome them, we hope.

Fingers crossed at your end as well.

We'll go straight back to Melbourne

where our two Canberra heavyweights

are waiting - Tony Smith and

Lindsay Tanner. We appreciate your

patience, gentlemen. Thank you.

Tony Smith made his comment on

behalf of the Coalition about Kevin

Rudd's trip to the UN. What's your

right of reply, Mr Tanner? Clearly,

the United States financial crisis

is causing great concern around the world, Bill. And Australia's well-

positioned to ride out these very turbulent tifplz, and we hope turbulent tifplz, and we hope that

there will be an agreement coming

out of Congress for the bailout,

because that clearly has huge

world's ramifications for the entire

world's financial system. But

Australia's got a strong budget

surplus, we've got very well-

class regulators under governments class capitalised banks, we've got world-

of both persuasions. We're very

well-positioned to avoid major

damages as a result of these the

events. We're not immune from the

influences. It's important to keep

the strong budget surplus and to

keep a very close regulatory eye

over what's going on. Lindsay

Tanner, the ANZ only said this Tanner, the ANZ only said

morning they think there'll be a

depression if these radical bailout moves

moves aren't approved over in the

United States - that almost

contradicts what we're saying here

about our independence, doesn't it?

I wouldn't necessarily agree with

that assessment. But clearly if

there is no serious bailout in the

United States, that is a very major

negative development, so we believe

as a government that it's very

important that the United States

does take strong action to unlock

the credit flows, because

essentialy what's happened is the

system is gumming up because nobody

is prepared to take risk or lend

because of all of the toxic assets

that are built up as a result of

the subprime crisis. So whether

it's the precise bailout package

that's been advanced or whether

it's a modified version, it is

really important that the US

Congress and the US Administration

do actually tackle and solve these

problems. I don't want to speculate on what the consequences might be

if they don't. But clearly I think

you've heard from George Bush and

other leading figures in the United other leading figures in the

States that if the problems aren't

tackled and solved, then tackled and solved, then the

consequences will be very serious

for both them and, obviously, the for both them and, obviously,

rest of the world. If it's

something important in one sense that

something is seen to be done as

much as being done, Tony Smith,

doesn't that put the emphasis back

on Kevin Rudd's trip as being on Kevin Rudd's trip as being

important? As I've said before,

Bill, he's tried to reinvent the

trip. He's there to speak at the

United Nations. You know, the

problem with Kevin Rudd is he's always thinking of something problem with Kevin Rudd is he's

symbolic and something short-term.

Now, the Federal Reserve, the US Treasury - they're all in

Washington. And back here in

Australia, there's a lot going on -

a lot to talk about here in

Australia. Malcolm Turnbull's made

the offer to sit down and talk the offer to sit down and talk with

Kevin about some of the things that

we might prepare for. But instead,

what we've seen is Kevin out of the

country and back here in the

Parliament Wayne Swan and Julia

Gillard all week spending more time

and more energy trying to attack Malcolm Turnbull and Julie Bishop

playing gotcha-politics, and

turning question thyme into a bit

of a -- question time into a bit of a farce. We'll have a farce. We'll have to move on to

the changes to the Medicare

surcharge. Lindsay Tanner, it seems

that debate is about robbing Peter

to pay Paul - how much we rob,

which one, and who's more important,

really important here is that Peter or Paul? Clearly what's

thousands of upon thousands of

middle-income families get a tax

break. This this was originally

introduced to high-income earnings.

When it was introduced, a family When it was introduced, a family

earning $100,000 was probably

reasonably described as a high-

income earner. What we've now got, income earner. What we've now got,

of course, is that over many years, of course, is that over many years,

that hasn't changed. So we believe

it's only fair and reasonable that

middle-income families should get a

tax break in the vicinity of tax break in the vicinity of about

$1,200 a year, or eerb even more,

depending on the exact situation.

The Coalition, along with a whole

lot of other things, has been

trying to block this in the Senate.

On so on the

On so on the one hand they're

preaching bipartisanship, Malcolm

Turnbull saying "Let's sit Turnbull saying "Let's sit around

and try and agree on how we can

tackle the economic circumstances."

On the other hand, they're trying

to destroy the Government's

Budgeted, wreck the surplts in the

Senate. Lindsay, that's rubbish.

People need to preach with clean

hands when they're preaching

bipartisanship. Bill, this is bad

policy that will damage the private

health insurance industry. On the

Government's own figures,

Government's own figures, $500,000

people will leave private health

insurance, five times tomorrow's

MCG crowd will leave private health insurance. That will force up

premiums for older Australians

who've been paying private health

insurance for many years. It'll put

a huge burden on them. And we'll

get a spiral effect as premiums go

up - more people will leave because

they won't be able to afford their

private health insurance. And that itself will force itself will force further rises in

the future. This is bad policy. If

it was so sensible and so good it was so sensible and so good from

Labor's point of view, Lindsay,

while didn't yov you ever mention

it before the election? Why didn't

you run to the election saying

you'd do this? I can tell you the

answer - because you knew that you

would be monstered in the court of

public opinion, because it is bad

policy that will damage private

health insurance. I'm very happy to

put our proposition up in the put our proposition up in the court

of public opinion, because I

believe that most people see it as

reasonable that a single person

earning $50,000 a year is not a high-income earner and shouldn't

have to pay this extra tax slug,

and a family earning a total of $100,000

$100,000 a year over two earners is

not a high-income family that

should have to pay an extra tax

slug. I'm happy to debate that in the court of public opinion.

500,000 more people queuing up at public

public hospitals. I don't accept public hospitals. I don't accept

that there will be higher private

health insurance premiums. Thank

you, gentlemen, on that note. We you, gentlemen, on that note. We

don't have a lot of time left but I

have to ask you, who out of the two

of you - perhaps both - has smoked

marijuana? I certainly have, Bill.

I've survived us the far, but I

certainly have -- thus far. But

I've survived my youth, as has

Malcolm Turnbull, and a substantial

portion of our generation have.

Tony Smith? I haven't, actually. At

university, obviously knew some

people that did. It might surprise

you, but back then I was a finely

tuned athlete, Bill. I also

happened to be an asthmatic - you

would have found me with a beer

after a cricket or a football match,

but that's it. You're pinching my

excuse! I asked that question excuse! I asked that question with a smirk because very a smirk because very quickly - is a smirk because very quickly - is

that a worthwhile question to even

ask? Is it relevant these days in

the political sphere? Look, I think

those people that did smoke it

probably thought it was harmless.

But what we do know today, and I

think Lindsay would agree with this

- it's a very dangerous drug and it

has a lot of consequences with

depression and all the rest of it.

So the serious message for young people is

people is "Don't touch it." Bill, I

think what we do in our private

lives - things of this kind, while

we are members of Parliament - are

a legitimate matter for public

debate and investigation. What

people have done in their youth

years before they were members of

Parliament or putting themselves Parliament or putting themselves in

the public arena up for election, the public arena up for election, whether it's Malcolm Turnbull or anybody else, I don't think really

matters. I don't think it's

anybody's business, frankly. I

completely agree with that.

Completely agree. I don't think

anybody should judge Malcolm

Turnbull's fitness for office on

the basis of whether or not he

smoked marijuana 30 years ago. We

can't have you agreeing completely!

Let's stop there. Before we go,

very quickly - we're nearly out of

time - a comment and a quick tip

for the grand final, please? Bill,

as Essendon is not playing, I'm

refusing to recognise it as a grand

final happening tomorrow. That's final happening tomorrow. That's

fair enough! I gather there is some

minor game going on between Geelong

and Hawthorn. I think the Cats will

probably get up by four or five

goals - assert their dominance in

the third quarter and scrape home

in the last it will probably be one

of the best grand finals in years,

they're clearly the best two sides in the competition. I'm looking

forward to the game, even though

the Bombers aren't there. Tony

Smith? Look, I agree with that. My

heart says Hawthorn - I'd love to

see them win - my head suis says

Geelong. I agree it will be a great

game - it's good that the best

teams of the year are playing off.

I feel a bit for David Wojcinski, I feel a bit for David Wojcinski,

who's missed out. There's always

someone who misses out on the grand

final. And I feel a bit for him

today. Thank you, Lindsay Tanner

and Tony Smith, for more entertainment. Looking forward

your company next time on the

Morning News. Bye for now. Thanks very much. Thanks.