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National Press Club -

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Our next full bulletin on

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the Opposition Malcolm evening. Up next to Leader of

Turnbull is before the

National Press Club. I'm Ros

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watching. Have a great

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This program is not subtitled

This Program Is Captioned Live.

Today at the National Press

Club - Federal Opposition

leader Malcolm Turnbull.

Heading into his first budget

week as leader, Mr Turnbull's

preparing to challenge the government's economic

management and provide

alternatives of his own. All at

a time of policy upleaval from

emissions trading to broadband.

Opposition Leader Malcolm

Turnbull with today's National

Press Club address.

Ladies and gentlemen,

welcome to the National Press

Club and today's National

Australia Bank address. It's a

pleasure to welcome back

Malcolm Turnbull. It's the budget season all around the

country but the federal one

next week. You could hardly

expect a more timely

appearance. I don't think

Malcolm needs an elaborate

introduction to an audience

like this. Please welcome

Malcolm Turnbull. (APPLAUSE)

Thank you very much, Ken.

All of us have great confidence

in our nation. We have

confidence in the energy and

the enterprise, the enthusiasm,

the capacity for hard work of

all Australians. And of course,

the great natural resources

with which we are blessed. But

as we consider these

challenging economic times, we

need to have a budget next week

that will be a platform for

recovery. It must have a plan

for recovery that is focused on

jobs and is focused on

delivering Australians the

capacity to spring out of this

downturn stronger than ever

before. It needs to embody a

clear and consistent strategy

for growth. If we look back at

the government's conduct of the

economy since its election, we

have to ask ourselves whether

they are capable of delivering

such a strategy, whether they

are capable of any consistency,

any coherence, whether they are

capable of deciding what they

are. Are they Dr Jekkyl, kind

Dr Jekkyl, handing out billions

of dollars, or are they mean Mr

Hyde, cutting back on essential

services, tightening the belt,

promising austerity?

Extravagance on the one hand,

austerity on the other. What is

it to be? Nobody knows. We see

today in the press revealed by

the Treasurer that we, after

seven months of economic

conservativeism from Mr Rudd,

that's what he sold himself as,

the great economic

conservative, we are going to

have at least, at least seven

years of economic austerity.

Seven years of deficit. And a

government debt how large? He

won't tell us yet. Perhaps

we'll find out next week. But a

debt that I suspect, I fear

will well exceed the $300

billion that the most

pessimistic observers have been forecasting. What are the

building blocks of a strategy

that's going to deliver that

platform for growth that is

focused on jobs, jobs, jobs?

The first thing, the

fundamental thing is that there

must be not a penny more of

debt than is absolutely

necessary. Not one penny more.

You see, we can argue up hill

and down dale the comparative

benefits or merits of one

spending program or another.

This school hall versus that

road verse us that port, versus

that railway, versus that

hospital. Argue all of those

points about spending. But the

one thing that is unarguable is

that if you have higher and

higher levels of government debt, you guarantee that

Australians in the future will

pay higher rates of interest

and higher taxs to pay it off.

That is in escapable. Now, it

governments spend borrowed follows, therefore, that when

money, they have to make sure

they maximise the return for

the taxpayer. It's the

difference, I suppose, between

a family that borrows money to

go on a lavish vacation or

borrows money to renovate their

house. At the end, after the

vacation, the family that's

done that, they're left with a

debt and some snaps in the

family album and some nice memories. The family, on the

other hand, that borrowed the

money to renovate their house

is left with an improved asset.

And something of real value.

And it's exactly the same with nation, exactly the same with

Australia. Debt which is

incurred to fund investment in

infrastructure that increases the productivity of Australia

will, in time, pay for itself.

Because it produces a stronger

economy, it generates more

jobs, more income and therefore

more rove knews to the

government. Now, Labor

endeavours to dumb down this

debate as they always do by

saying that if you agree or

concede that there should be

any level of debt, even a

dollar, then you are giving them carte blanche to have as

much debt as they are

and they do the same thing with recklessly prepared to incur

the deficit. They say: if we

concede that the economic

downturn is going to put the

government into deficit, then

we are giving them a carte

blanche for any level of

deficit. Now, that defies

commonsense and it is an insult

to the intelligence of all

Australians. We need to know

that we have a government that

will incur no more debt than is

absolutely necessary, and will

keep the deficits as low as

possible, and will have a plan

to restore us to surplus. That

is the challenge. And yet we

see from this government so

many mixed messages. So much

confusion. As I have travelled

around Australia, I meet so

many people scratching their

heads about what the

government's economic agenda

is. They ask themselves and

they ask me: what are we going

to get for all this debt? What

is actually going to be left?

In Cessnock in the Lower

Hunter, in the week that the

$42 billion cash splash was

being debated in the press,

they were saying: well, he's

sending out all these cheques

for 900 bucks, but what about

the F3 link that links the

Newcastle freeway to the New

England Highway? He's not doing

anything about that. Mind you

that's in Joel Fitzgibbon's

electorate so I goes someone

who can't manage to pay the SAS

on time would struggle to get a

freeway under way! In Mackay in Queensland they asked why there

was no funding for the missing

northern rail link and in

Gladstone they asked why there

was no money for their airport.

Vital bits of economic

infrastructure, for which the

government has allocated

nothing. And everywhere in

Australia, people ask why so much has been spent on

hand-outs and so little or

nothing spent on maintaining

and upgrading hospitals.

Remember this: the $23 billion

in cash splashes could have

paid to complete the

duplication of the Pacific

Highway from Brisbane to Sydney

to Melbourne right across to

Adelaide. Or it could've paid

for 19 new public hospitals.

And instead, what have we got

for it? Well, $23 billion went

out the door, most people

sensibly used it to pay down

debt. It didn't deliver one

job, it didn't deliver any

economic growth. Unemployment's

continued to rise. Economic

growth's continued to go

backwards. But what it did

deliver was $23 billion of

debt. And you see, this, the

spin of the government is well demonstrated in the way they

talked about the cash splash

back in December as revealed

last night on Channel 7, with the documents they obtained

from the Treasury. You could

see there that there was no

reasonable basis at all for the government to say the $10

billion handed out in cash in

December would create 75,000

jobs. That was at best an

unreal outcome, and highly

unreal, based on the assumption

that every single dollar of it would be spent and would be

injected into the Australian

economy which of course would

never happen. 80% of the money

was saved. It was always

inevitable most of it would be

saved and so it was. But the

government went out there and

said this will create 75,000

jobs and they had no basis for

saying so, so how can we trust

them? The plan for recovery

that the government produces

and it should produce one in

the budget next week must be a

credible one. We have to

remember that a high level of

debt today, which the

government would justify as

being necessary to deliver a

fiscal stimulus, will

undoubtedly be a fiscal drag

tomorrow. I mean, if we think

of Australia as an athlete, as

a runner, what is the

government's job? The

government's job is to enable

Australia, enable that athlete

to do their best. So there

should be no more hurdles in

that athlete's way than can be

avoided. There should be no

lead weights put in his pockets

or heavy backpacks put on his

back. And yet that is what the

government is delivering to us

with these higher and higher

levels of debt. Inevitably this

will slow the economy, and we

are in a very competitive

world. We must ensure that we give Australians the best

chance to do their best. It's

the same with the - this

hopelessly flawed emissions

trading scheme. Who knows will that will end up? The

government seems to change it

by the day. What we do know at

the moment is that what they

have is guaranteed to slow our

economic recovery, cost us

jobs, export jobs, tragically,

export prosperity, and export

the emissions as well. No

economic gain. In fact, a

serious economic loss, and no

environmental gain either. Now,

one of the key elements in this

strategy has to be the strategy

the government should undertake

is building confidence.

Confidence is absolutely vital.

And Mr Rudd recognised that and

that's why in 2007 he went around trying to present

himself as a younger version of

John Howard. The great economic

conservative. He went to the

expense of buying television

ads and posing in front of

office buildings, talking

seriously, gazing at us

Ernestly through his spectacles

about what an incredibly

conservative person he was.

Well of course he has now

become a democratic socialist

although when we see this he

has switched to being a

democratic socialist, which is

just another way of saying

you're a socialist that doesn't

believe in violent revolution.

Which is a relief, I guess, that's some consolation for

those of us on the Conservative

side of politics. (LAUGHTER)

But I'm reminded when I think

about his socialism of the very shrewd observation Margaret

Thatcher made about socialists

when she said "The problem with

socialism is that at some point

you run out of other people's

money." (LAUGHTER) And Kevin

Rudd, I'm afraid, has reason

out of all the money that

Costello and John Howard left

him and he is now borrowing

money from the rest of the

world. So his commitment to economic conservatism didn't

last very long and he reminds

me of the man who, groggy and

hung over on New Year's Day,

resolve s to abandon his wild

and reckless way of living,

only to go back to his bad old

ways the moment the hangover

wears off. What are we to make

of a government that has had

Jekkyl and Hyde approach to the

economy? The other day I was in

Launceston, and I went to into a radio station there. They

were having a competition. And

people were being asked to call

in and say what they were going

to spend their $900 cash

hand-out on. And the whackyiest, the three

whackyiest entries were going

to get another $900. That's the

sort of mind set that Kevin

Rudd's encouraged. And I

wondered as I listened to that,

just thinking about the debt

that all of those $900 were

going to impose on Australians

in the future and thinking

about all the jobs they would

cost, all of the tax that

people would have to pay, I

wondered if there would be

another competition which might

invite people to call in and

say what they might've spent

their wages on if they had the

job that they'd lost. Or how

they might've spent the extra

tax they had to pay to fund

Labor's debt. Or what they

might've done with the money

that they had to pay for

medical services no longer

available to them thanks to

Labor's budget. So no wonder

people are confused. If there

was enough money to announce a

$43 billion national broadband

network a few weeks ago, how

can there be questions about

whether it's possible for the

government to finance critical

health spending such as cancer

drugs? If there was enough

money to hand out $23 billion

in one-off payments, how can

there be any question of the

government meeting in full its

commitment to increase the

single aged pension? And since

there was $3 billion available

to put pink batts in the roofs

of most Australian homes, how

can there be any need to

curtail part pension payments

or concessions to self-funded

retirees on modest incomes,

many of whom have already

suffered devastating losses in

their superannuation funds? And

since $14.5 billion is being

spent on primary school

libraries and assembly halls,

surely there can be no need to

squeeze middle class income by

increasing the cost of

families' private health

insurance. And surely there can

be no possibility of Labor

reneging on the July 2009 and

2010 income tax cuts, so emphatically promised to

Australians at the last

election. And now enshrined in

legislation since the 2008

Budget. Tax cuts which I would

remind you the Treasurer said

would reward the hard work of

Australians, would be a

down-payment on a more internationally competitive tax

system, would create an

additional 65,000 jobs, would

enhance incentives for

taxpayers to upgrade their skills, would deliver

assistance to working

Australians and would be a

first stage in the government's

tax plan to flatten Australia's

personal income tax system. So

if the legislated tax cuts are

reversed, will Labor concede

that as a result, hard work

will not be rewarded, our tax

system will be less

competitive, our productive

capacity will be diminish t,

more jobs will be lost, skills

formation will be stifled, families will fall under more financial pressure, that Australia will not be prepared

for its future economic

challenges, and no, it's plan

is not after all to flatten our

personal income tax system? And

for the absolute peak, the Acme

in economic recklessless and

inconsistency, consider Labor's

announcement of the $43 billion

national broadband network. I

just remind you that last year

the government observed

"Efficient public infrastructure investment

requires decision-making based

on thorough and rigorous cost

benefit analysis. A commitment

to transparency at all stages.

A public sector financial

management regime with clear

accountabilities and

responsibilities." You can

just imagine the sanctimonious

Ernest way the Prime Minister

would've read that out if he'd

been asked to. Real

determination. Real

consistency. But when Labor's

tender for a national broadband

network failed, and they were

left with nothing, with no policy, the Prime Minister

announced that he would deliver

to 90% of Australian households

and businesses a 100 megabits

per second high speed broad and

network which would cost $43

billion, would be commercially viable, that the private sector

would invest in, but they

wouldn't be able to buy 49% so

he'd have to push a back, it'd

be such a great deal and he

then went on television and

encouraged mums and dads to

invest. He made all these

claims about a $43 billion plan

without any business plan at

all. Not a line. Think about

that. If any of the business

people here today or watching

this broadcast on television

were to do that themselves,

they would find themselves down

at ASIC so fast dealing with

sole very unpleasant issues

about their conduct. This was

recklessness of the highest

order. The next day, the

Treasurer was asked: you've said this is commercially

viable. How many people will

take up the service? Didn't

know. And what will you charge

them? Don't know that either.

They didn't know anything. They

plucked that number out of the

air, and put it out there as

yet another promise. Not a line

of analysis. As many have

demonstrated, it's perfectly

plain that even if you make

very generous assumptions about

the take-up rate of this

service and a realistic cost,

it cannot possibly be a

commercially viable service.

It's often shade that a vision

without resources is a

hallucination. A $43 billion

vision without any business

plan, without any way of

knowing how or whether it can

be paid for is more than that,

worse than that; it is a very

dangerous delusion indeed. Now,

by contrast, we in the

coalition have set forward a

positive agenda. We have

developed, following our work

with the community through our

jobs for Australia program of

forums and we've held nearly 50

of those around Australia,

public meetings. We have a web

site, jobsforaustralia.com on

which we've had over 300

submissions. We've been

reaching out, talking to

business, particularly all

business, which is the

engine-room of the Australian

economy and getting ideas to

form our own platform, our own

plan for recovery. And so when

Mr Rudd says the only alternative to his plans is

nothing, that's one of his

favourite lines. He puts up a

proposal and then he says "If

you don't agree with that, you

agree with nothing." So it's

his way or nothing. If you

don't agree with him, then you

have nothing to say. Well, we

have a lot to say, just a pity

that the Prime Minister isn't

listening. Let me run through

some of the practical proposals

we've made as alternative

proposals to his big-spending

ineffective big-spending

programs. We proposed instead

of the April cash splash we

bring forward for less than

half the cost the July 2009 and

2010 income tax cuts. Surely

now after the experience of the

December cash splash, of which

80% was saved, it is perfectly

plain that increases in

permanent income, which is what

this would've been, were more

likely to boost spending than

one-off hand-outs. In another

proposal, which has a very

modest cost, arguably over time

no cost to the budget at all,

we proposed that businesses be

able to carry back losses. So

if businesses make an operating

loss this year or next, they

should be permitted to carry

back up to $100,000 against

taxes paid in the past three

years. Now, tax loss carrybacks

are allowed in many comparable

countries, and they obviously

do a lot to bolster cash flow, particularly in small businesses in these tough

times. That is a good

suggestion, a practical

suggestion with very little

cost to the budget, because

obviously tax loss carried back

and so you recover the tax that

you paid in the year when you

made a profit, a tax loss

carried back cannot be carried

forward so it's really a timing

issue. We proposed that the employment cost for small

businesses be reduced as an alternative to some of the

measures in the $42 billion

fiscal stimulus. This would've

redulsed the oncost of

employing Australians for small

businesses and by rebating a

portion of the superannuation

guarantee contribution.

Recognising that the key focus

for stimulus activity if the

government is spending in that

direction should be on investing in economic

infrastructure, we proposed

that the increased funding for high-quality public

infrastructure, at least 50% of all stimulus outlay, should be

directed to that end. And that

is, areas such as road, rail,

ports and other economically

productive assets. So far,

under Labor, it's been more

like 5%. We've proposed again a

practical measure with a modest budgetary cost, green

depreciation for buildings,

doubling the depreciation that

building owners can take

advantage of for investments in

green refit, increasing the

water or energy efficiency of

buildings. We've proposed an

approach using the Internet to dramatically streamline red

tape. One of the most common

complaints we've had from small

business at our forums is just

the simple hassle, the red-tape

hassle, of being in business. I

think often in this town here

in Canberra, big business gets

a very good hearing. And big

businesss have a lot in common

with the public service. A middle-level executive in a

large company, a bank, for

example, has a fair bit in

common with a bureaucrat in

Treasury or Finance. But a

small-business person has to be

everything. They have to be the Chief Executive, the chairman,

the accountant, the HR officer,

the information officer. Have

to do everything. And the

amount of red tape and

regulation we impose on small

businesses makes it very hard

for them to do their job of creating the jobs Australia

needs. We've focused on that

and responded to that. You will

recall here at the Press Club,

I've previously proposed that

we should reform our business

bankruptcy laws. At the moment

our insolvency laws, unlike

those of the United States, pay

far too little regard to

reconstruction and

rehabilitation of businesses.

All too often insolvency

results in a fire sale,

destruction of value, loss of jobs, bad result for the

business and the economy all

around. The focus should be on

reconstruction and

rehabilitation and so a system

closer to the US Chapter 11

regime would be very valuable.

Again that's an example of a

positive proposal that we have

made, in this case, as with

many of our proposals, with

very modest, in this case no

budgetary cost, and then the

others with a modest budgetary

cost. They aren't our whole

plan of course. We'll continue

to develop that as we go forward towards the next

election but we have to

remember that as a matter of

our track record, we have

deliver ed solid, sound, responsible economic

management. Remember that in

2007, Mr Rudd inherited zero

net Commonwealth debt. In fact

by running 10 surpluss in 12 budgets the previous

government, the Howard

Government had paid off $96

billion in debt left behind by

Mr Keating an accumulated net

assets of about $45 billion or

4% of GDP. We took ldz 96

billion of Labor debt, we paid

it off and we had $45 billion

in the ba, cash at bank. That's

what Mr Rudd was left with. He

was dealt the best hand of

economic cards any Prime

Minister could ever seek. Now

we're promised seven or more

years of huge budget deficits.

Sounds like a - sounds like an even more frightening version

of the pharaoh's Dream. We had

seven months of economic

conservatism or prosperity,

followed by at least seven

years of austerity and

deficits. And what will the

debt be at the end of it? 300

billion dollars frankly looks

optimistic. And this $300 billion, it's a telephone

number, a very long telephone

number, but it means $15,000 of

debt for every man, woman and

child in Australia. So a family

of four, it means $60,000 of

debt. That's what our children

will be left with by the Rudd

Government. It is a frightening

prospect for them. And it

underlines the way in which

this government, with its

classically Labor addiction to

debt, has undermined our

confidence as nation, our

economic confidence, and above

all, and worst of all, impeded

our capacity to recover from

this downturn. Because just

like that athlete at the

starting blocks ready to go, so

is Australia, so should

Australia be poised to recover

from this downturn and we need a government that is clearing

the path ahead of us, taking

the hurdles out of the way,

ensuring that we are not

weighed down with any

unnecessary burdens. But

instead we have a government

that's addicted to debt. A

government that doesn't know

whether it's Jekkyl or Hyde.

Doesn't know whether it's

spending up big, well, it has

spent up big. A government

that's going to tell people who

have just received $900 in a

one-off payment in April, tell

them in May that they are going

to lose vital services because

of the need to tighten their

belts. What have we seen for

those cash hand-outs? We have

seen no more than the people in

Mackay, the people in Gladstone, the people in

Cessnock, the people all around

Australia who say: where is the

investment in tangible economic

infrastructure? Where are the

roads, where are the ports?

Where is the value that has

been created by this

government? And the answer is:

there is none. We go into this

difficult time, this next phase

with vastly more debt than we

should have, and it's not

solely a result of the economic

downturn. There are tens of

billions of dollars thrown onto

the shoulders of Australians by

the deliberate, wrong-headed,

mistaken, reckless policies of

the Rudd Government. Now, we

recognise that Australians have

put a lot of faith in Mr Rudd.

Elected him as they Prime

Minister and they want him to

do well. They want him to

success. They've cut him a lot

of slack because of the global recession. But now, Australians

are starting to see the result

of Mr Rudd's lack of

discipline, lack of leadership.

They're seeing the results of

his weakness. I ask you this:

when did Mr Rudd last make a

tough decision? When did he

make an unpopular decision? All

he has done is be Santa Claus.

He has handed out money left,

right and centre. They're

foreshadowing some tough

decisions in the budget. We

will see what it contains. But

right now, all we have seen are

weak decisions lack of

leadership on every front, and

the problem is as Margaret

Thatcher so wisely observed,

the problem with socialists

like Mr Rudd is that at some

point, you run out of other

people's money. And he hasn't

just run out of other people's

money, he has run out of ideas.

He needs to have, if the budget

next week, a a plan for

recovery. For the sake of all

Australians I hope he does. I doubt that he will. But I say

this to you, my friends: when

the time comes, we in the

coalition, all of my colleagues

here today and assembled

together in Parliament, we will

return to government with your

support, and we will put

Australia's finances back to

right. We will return the

budget surplus. It won't be

easy. It won't be quick. I fear

we are going to be left an

almost inconceivable level of

debt by Labor. But you know we

have done it before. And we

will do it again. Because we

will stand up for Australia, we will make the tough decisions,

the strong decisions, we will

lead where others have not, and

Australians know they can count

on us to get it right, to get

our finances right, to ensure

that Australia rebounds from

this downturn and realises its

potential, its enterprise, and

its energy and the prosperity that that will deliver. Thank

you very much. (APPLAUSE)

As usual, our media

questions follow. The week

coming up or the period coming

up is important both for the

budget and for decision on the

future of the emissions trading

scheme. On that first part, the

government has deferred it for a year, something that you

would support, in fact it's

something you've been

advocating, but big business is

looking for certainty. Those

big projects off Western

Australia that take 30 years, a

hell of a lot of dough, they

want to know exactly what's

going to happen. How can you

give certainty to them if you

are considering knocking this

current proposal off and

waiting for the next version?

If I could dip into the budget

field, just going back over

economic history a bit, you

referred to the previous

government, said it had

produced all these surpluses

and a reserve of some $45

billion. Why didn't the

previous government increase

the pension? Well, just on the

pension - the previous

government consistently increased benefits to pensioners, across a whole

range of measures. But

nonetheless it's one of the supporting pensioner - supporting pensioners is one of

those things that has to be

done again and again. It's not

a job whose task is done once

and for all and there is, as

you know, a real need to

increase the single aged

pension, to increase it to two

thirds the level of the rate

for couples. Just turning to

the emissions trading scheme -

what we need is a scheme that

is effective. At moment we have

a proposal from Mr Rudd which

changes by the day. Let's not

it's only a knew months ago, Mr

Rudd said it'd be reckless and irresponsible to delay the

start of the scheme and he put

his proposal down there and he

said to us that we would be

acting immorally if we didn't

immediately sign up to it and

any deviation from his proposal

would be a moral outrage, an

environmental crime. Economic

recklessness. Then this week we

he has done a backflip and

changed it all again, but the only thing that doesn't change

is his rhetoric. He changes his

plan, and then says if we don't

agree with his new plan, we are

moral outrages, economically reckless, environmental vandals

and so forth. The key thing

with the emissions trading

scheme is to get it right. We

need a scheme that will protect

jobs and benefit the

environment. At moment his

scheme will do neither. It will

send jobs offshore. Just look

at the example of the coal

industry, our most important export industry. The effect of

this scheme, as every coal

mining company in Australia has

said, is simply that we'll produce less coal in Australia

and there will be more coal

produced in Indonesia, South

Africa, Columbia. In other

words we'll export the jobs and

the emissions. The same amount

of emissions, just from a

different part of the world.

That approach is futile. He

needs to develop a bet

questioner scheme. We have

offered a road map of how to

get there. We should take the

advantage of his now

preparedness to start the

scheme later, to spend more

time getting it right. You have

to remember that our commitment

to developing an emissions

trading scheme was always that

we should not finalise the

design until after the

Copenhagen summit at the end of

this year. Get the scheme right, get the design right

there is no need to finalise it

in the next five or six weeks.

They have not done adequate

economic modelling particularly

on the impact of jobs in

regional Australia. So let's

take the opportunity of referring it to the

Productivity Commission, to

look at the scheme design,

other alternatives, have the

benefit of what happens in

Copenhagen, and then we'll have

a much better basis to get a

scheme that works. That's good

for jobs and good for the

environment. On the stimulus

and the spending, the retail

trade figures for March today

showed an increase of 2.2% for

the month of March which I

assume the government will say

is a result of their stimulus

package. I would like your

thoughts on that. If Malcolm

Turnbull were Prime Minister

right now, what level of debt

would you consider acceptable

in the current circumstances?

Could you nominate a figure?

Mr Swan won't even tell you

what figure of debt there will

be. When asked today on AM what

he was going to do about paying

down the huge debt he was

incurring he said "The

challenge is for Mr Turnbull to

answer that question." The sad

and melancholy fact of

political life is the challenge

is for Mr Swan to answer that question next week in the

budget and we will respond to

that then. Oh the retail

figures. Sorry. Well, they made

the same point about the retail

figures in December. The real

issue, if you hand out $14

billion in one hit as has been

done in April, obviously some

of it will be spent. The

question is how much of it will

be spent. The track record, I

don't think there is any doubt

about, this the track record

from the December cash splash

was that about 20% or 17% was

spent. So yes, that had an

impact on retail sales figures

but it was we little bang for a

very big buck of the that's

really the point. What are you getting from these cash

hand-outs. Now we know that

there was no reasonable or

responsible basis for the

government to say the money

paid out in December would

create 75,000 jobs. We know

that, from the Treasury's own

papers that had been produced

under the FOI. Now, the same

will be true with the cash

splash in April. The bulbing

will be saved, some will be

spent, some will be spent in a

way that benefits the economy,

some won't be, but the net

outcome will be very modest. If you want to spend government

money on stimulating the

economy, then you should spend

it on infrastructure. Now, you

don't just have to spend it on

building new roads, you can

spend a lot of money on maintenance. Right around

Australia, there are

maintenance programs for public

infrastructure, be it roads, be

it schools, be it hospitals -

across-the-board, bridges.

Ports. Railways. All of which

can be brought forward and

money can be spent immediately.

There are plenty of

shovel-ready projects. The

projects I mentioned in the

Lower Hunter, the F3 link is absolutely shovel-ready. All

the land has been acquired, all

the planning approvals have

been given. The money was in

fact set aside under our

government, and yet for reasons

only Kevin Rudd and Joel

Fitzgibbon can explain, nothing is happening. It seems to have

been taken off the list. It

seems that - I don't know

whether this is some

punishment for Mr Fitzgibbon's

bungles as Defence Minister but it seems very unfair to the

people of that area. Bob Baldin

the pleb for Patterson is

taking that case to the

government all the time, but to

no avail so far. That's an

example of the type of spending

that will genuinely stimulate economic activity, not just

today in building them, but in

the future. You probably notice

that one of our backbench yers

Bronwyn Bish shif gave fan

interview to her local paper

this week. In it she said that

the reason the corporate

sponsors are abandoning your

party is that they no longer

know what it stands for, that

you as leader are going soft on

key issues, that those sponsors

no longer believe or don't

believe that you can deliver

the party's - the coalition

parties to government. I wanted you to respond to that. In doing so, can you tell us what

plans, if any, you have for

renewal in your party to

encourage some of the old

timers to hit the road and

bring in some new faces and

some fresh ideas. (Laughs) Let

me say this: I think we've

discussed this in this room

once before, in a different

context. But the issue with

everybody, be they journalists

or politicians or lawyers or

business people or whatever,

the issue is not your

chronological age. It's your

capacity and your competence.

Joel Fitzgibbon is a relatively

young man. What a bungle he has

made of Defence! Stephen Conroy

appears positively youthful.

This is the man that has completely bungled the national

broadband tender, and

presumably suggested to the

Prime Minister that they

announce a $43 billion

broadband project without any

financial analysis at all. Now,

I don't think either of those

two parliamentarians relatively

useful though they may be

deserve to be any longer ministers or even in

Parliament, based on their

capacity and their performance.

So the real issue is capacity,

it's commitment. As far as

experience is concerned, we

have a good combination in our

party of age and experience.

Every election , there is

renewal. People retire. New

people are elected. That

happens every election. But

right now, looking at my team

is a team of considerable

experience, it's a great

mixture of diverse backgrounds,

experience in business,

experience in other walks of

life, experience in Parliament,

including many experienced

ministers, a number of whom are

here with us today. So I'm very

confident that we have an

outstanding team with all of

the elements in place of

diversity, of life's

experiences. And when you

compare the consistency and the

strength of the messages we are

delivering and the preparedness

that we have, unlike Labor, to

say things which are unpopular,

it was not popular to say the

$42 billion stimulus, let alone

the $14 billion cash splash in

February, was a bad idea. It

was not popular to say that.

And propose instead more

measured programs costing less

than half the amount that Mr

Rudd was proposing. A number

the journalists here said it

was political suicide to do

that. But it was right. We have

the courage to say and do what

is right. That's leadership.

That's strength. That's what Mr

Rudd lacks . And it's what we

demonstrate as an opposition,

and we will demonstrate once

again when we return to

government. You just mentioned

preparedness. There's a lot of

speculation around at the

moment about the possibility of

an early election, possibly on

emissions trading. Are you

prepared to go to an early

election? Would you be prepared

to fight an election on that

issue of emissions trading and

jobs and so forth and who will

be your candidate in Higgins?

Really, Mark, let me just say

this is about an early

election. Having made such a

terrible hash of the economy,

having run up so much debt,

having wasted so much money,

having demonstrated his

financial recklessness again

and again, I can well

understand why Mr Rudd would

want to run to an early

election. The only thing encouraging him to think about

an early election is that great

note vaitor, fear. It is fear.

He knows that the penny is

dropping. He knows the scales

are falling from all of our

eyes as we see the reality of

his incompetence. As he see the

consequence of having a Prime

Minister who has a political

strategy for everything but an

economic strategy for nothing.

This is a Prime Minister who

remember in his first year

talked up inflation and

interest rates at exactly the

time when rates should've been

coming down. How much stronger

would the Australian economy be

today, how many more

Australians would be employed

today if we hadn't had two

interest rate rises in 2008? I

can tell you, there's no doubt,

you can argue about the extent

that the economy would be

stronger and there'd be more

Australians in jobs. Because Mr

Rudd and Mr Swan by talking up

inflation caused this economy

to tighten at a time when we

should be doing exactly the

opposite as indeed were other

countries. It's a pity they

didn't look overseas and see

what was happening. They called the economy absolutely wrong

for almost all of 2008 until

September and the collapse of

Lehman Brothers, and final ly

they Shaw there was a imagine

problem in the credit markets

internationally. And then of

course we've just had one

rushed decision after another.

How many jobs have been lost

because of the consequences of

the unlimited bank guarantee?

Think of all the mortgage funds

that were lending to the

property industry, that can't lend any more because they don't have the benefit of a

government guarantee. They are

put out of the market. How many

jobs have been lost in the

construction industry because

of that. So the real issue in

terms of an early election, Mr

Rudd can find a way to go to

the polls early, and if he

wants to do that he is fine. We

are ready to fight an election

any day he wants to have it.

Now or at the appropriate time.

Now we believe as I think most

Australians would that the

Parliament should serve out its

full term but if frightened of

facing the full consequences of

his recklessness, he wants to

run to an early election, then

we will fight him at that early

election and will be ready to

do so, because what we will be

fighting that election on is

economic management. We will be

holding up the product of his

time in office and comparing

that what we did in government

and preparing that to the

strength of our commitment to

making tough decision s in opposition. I listened in your

speech to your comments

regarding Kevin Rudd's

leadership abilities. As Mark

Riley pointed out, your

leadership is from time to time

the subject of comment free

from our own colleagues. I

think it underlines the idea

and I wonder whether you agree

with this that you yourself are

a political moderate leading a party which is still quite

heavily dominated or featuring

anyway quite conservative MPs.

What leadership ability do YOU

have to be able to be able to

craft a policy platform that

you can take to an election and

what is the risk that as Prime

Minister you'd spend more time

arguing with your backbench

than actually governing? I am

the Liberal Leader of the

Liberal Party and it is a great

political tradition. It is a

broad church, as John Howard

has always said and we often

debate issues but we debate

them and then we agree on them

and we agree on issues, we

resolve on what we will do

together, and then we get on

and do it. So that is measure

of our commitment. I take your

point about on the issue of

debt, that we don't know what

numbers are going to be in the

budget next week. It's

difficult to comment on them.

But the deterioration in

government revenue has been

known since February...'

That's a very good point. These

numbers are months old. Now,

you dispute the government

saying that your policies would

incur debt of about $177

billion. If that number's

wrong, what number is right?

Well, let me just say this to

you: you made a very, very key

point there. That the decline

in government revenues has been

known for a long time. You said

since February, but it's been known obviously by the

government and most people for

a lot longer than that. So just

think about this: let's reflect

on this calmly and without any partisan political back-biting

or slanging at each other. Just

think about this: we have a

government that knew its

revenues were declining. We

knew that its deficit was

getting bigger and bigger. We

knew that its debt was getting

bigger and bigger as a

consequence. And yet, they went

out and gave $14 billion away

in a single cash splash, even

though they knew that the cash

splash in December had been

completely ineffective in terms

of jobs and in terms of

economic activity. So there's

the real recklessness. This is a government that quite

deliberately and with its eyes

opened made on that point

alone, and many others, made a

bad situation worse. And I ask

you, all of you, and everyone

watching this: if you knew your

financial situation, your own

personal financial situation,

was deteriorating, would you go

to the bank, borrow a fortune

and spend it in one hit on a

holiday or something like that?

Of course you wouldn't! It

defies commonsense. That is the level of recklessness that we

have from this government. They

try to see themselves as

victims. They present

themselves always as victims.

They are victims of the global

financial crisis. It's

everybody's fault except Kevin

Rudd and Wayne Swan's. But the

fact is that we elect

governments to govern. We elect

leaders to lead. Kevin Rudd and

Wayne Swan have been elected to

deal with whatever circumstances present them

with. When we were in

government, we dealt with the

Asian financial crisis. We

dealt with 9/11. We dealt with

SARS. We had many unexpected,

unanticipate ed crises that

came, came across our bows and

we dealt with them and handled

them well. We got on with the

job. What these two have done

is ignored the fact that they

are responsible for managing

Australia, and simply gone on

spending and borrowing without

regard to the consequences. And

I ask every Australian today:

would you, if you knew, if you

knew your financial situation

was gonna deteriorate, if you knew your income was going to

be reduced, would you go to the

bank, borrow a fortune and

spend it? And you know you

wouldn't. None of us would. But

that's what Swan and Rudd have

done. Several months ago your

shadow Treasurer Joe Hockey

warned that the opposition

would block or oppose key budget measure it is you

considered those to be bad

policy. Putting aside the

appropriation Bills. Given the

government is clearly going to

take the axe to a raft of

so-called middle-class welfare

programs, and given that it's

gonna tighten the windback or

possibly scrap a number of programs introduced by the

former Howard Government, can

you say today that you are

prepared for a legislative

stoush on the budget? Will you,

if there are particular

programs you consider to be bad

policy, whether it's spending

or revenue, will you oppose

those in the Senate and the House of Representatives when

you have the chance? We'll

deal with the policies when

they're presented. If Mr Swan,

Mr Swan won't tell us what's in

the budget. I can't tell you

how we'll respond to the budget

until we see what's in it. Mr

Turnbull, the government is

indicating it hopes to return

to a surplus by 2015/16. If you

were elected next year, when

would you deliver your first

surplus budget? And secondly,

on climate change, do you still

believe that an emissions

trading system is vital to a

credible climate change

policy? Well, dealing with the

questions in the order they

were asked - the one thing

Australians know is that a

Turnbull Government will return

Australia to surplus long before a Rudd Government ever

will. In fact, I don't believe

Kevin Rudd will ever preside

over a surplus, ever. I don't

believe the Labor Party will

preside over a surplus budget

at all. They have no hope. You

have to judge people on their

track record. They have no discipline. Their recklessness

is not going to change. This is

just old Labor. What do Labor

Governments do? They run up

debt and then they leave the

economy in the mess. The

Liberals, the Nationals come back, the coalition comes back,

and we fix it up. That seems to be pattern. Kevin Rudd said that was going to change

because he was an economic

conservative. Well, it only

lasted seven months, so it was

a very short time frame. Of

course he still claims to be an economic conservative which is

why it's unfair of chameleons

to describe him as a chameleon

because as we all know chameleons are only ever one

colour at a time. (Scattered

laughter ter) In terms of an

emissions trading scheme -

there is no doubt that in -

that ultimately, if the world

is going to reduce its C O2 emissions effectively we'll

need to have a price on carbon

of the most people - the vast

majority - the majority,

anyway, of economists and

business leaders prefer a

trading scheme as opposed to a

tax. I won't debate the merits

of the two and of course there

are schemes such as that

proposed by Warwick McKibbon

which are called hybrids

because they have some of the

features of a tax and some of the features of a trading scheme. The challenge for

Australia is and always has

been designing an emissions

trading scheme which does not

damage us economically very

severely, particularly our

emissions intensive trade

exposed industries severely,

without any environmental benefit. This is the simple

example is the coal, the coal

industry. You put a heavy

carbon cost on coal, our

biggest export industry.

Consequence is we mine less

coal in Australia, you mine

more coal in Indonesia. And it

will be probably the same

companies doing it because they

have assets in both places. So no environmental gain

whatsoever. So grappling with

that is really at the core of

it. This has been I guess the

fundamental blunder that Penny

Wong and Kevin Rudd have made

with this. It is now - the

scheme has now become so

complex, so convoluted that one

wonders whether it can be

saved. Frankly, now that the

government has said it needn't

start until 2011 and as my

colleague Greg Hunt pointed out

because they're proposing a

fixed price for the first year,

the trading scheme itself won't

start till 2012, so now they're

prepared to do that, we've got

the time to get it right, and

the best course of action, the

one that the centre for

international economics has

recommended to us and the

report we commissioned from them, the independent report we

commissioned from them, the

best course of action would be

to do the work, the analysis thoroughly, compare it against

other alternatives and you have

the Productivity Commission

ready and raring to go to do

that. And that would enable us

to get a scheme that's right,

to get something that works.

'Cause what we've got at the

moment, frankly, will do a lot

of economic damage and won't cut emissions effectively

either. That's why it's got no

friends. Our best opportunities

for abating CO2 emissions have

been largely, if not entirely,

overlooked by the whole Rudd

carbon pollution scheme. So it

is - there isn't much good you

can say about it. That's

frankly why very little good

has been said about it other

than by Mr Rudd and Senator

Wong.

Closed Captions by CSI THEME MUSIC Ian Kiernan - On Talking Heads, clean up Australia and the world. the journey of a man who helped 'It's just been a wonderful effort spirit is very much alive and it shows that the community in our fine city.' then went to sea. 'He once owned 400 houses, an obsession with junk.' Along the way he developed

a motivated man, Ian Kiernan has always been or making a difference. whether it's making money, is motivating the rest of us. But it's turned out his main skill

Thanks, Peter. Ian, welcome to Talking Heads. Thank you. It's great to see you. You're the sort of guy that writes at the start of each year. a diary of goals Exactly. empty my mind of everything I sit down, what I want to do in that year. and just absolutely refine and achieved 27 of them. One year I wrote down 37 on this year's list? What have you got To win three major ocean races, of retirement in its 50th year. cos I brought my boat out

the importance of the message To continue to spread primary thing. that the environment is the absolute

for Clean-Up To raise even more funds so much we want to do. because there is "Try and be a better Australian" And I generally write down, it's not always that easy. and for a larrikin and rogue, really. Ian, you're an old sea-dog (LAUGHS) I guess so! to be Australian of the Year. An unlikely character a privateer in another age. You think I would've been (LAUGHS) Indeed!

of that at times? Well, you must be struck by the irony quite like larrikins. Yeah, but Australians What drives you? A number of things. So many times I've said, you bloody idiot. "What have you taken on this time, do that?" How are you going to possibly the fear of failure drives me. So then, what my generation But when I look at and previous generations have done on the environment to impact so seriously and my beautiful grandkids, and I look at my kids and do everything I can I'm absolutely determined to try a better future for them. to see if we can frame up on this magnificent harbour I had the good fortune to grow up what a wonderful playground it was. and at a very early age discovered But in those early years, to the environment. I didn't pay much attention I had to learn that later. and was captured by the Japanese My father fought in Malaya and worked on the Burma railway. quite ill, in 1946. He came back, very much weakened, From the moment my father came home, through this horrifying event this big ma