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Meet The Press -

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DISCUSSIONS ABOUT JOEL FITZGIBBON'S POSITION, THE ECONOMY AND G20 MEETING, EXIT STRATEGY FOR
AFGHANISTAN, CHINA'S LARGE INTELLIGENCE EFFORT

MEET THE PRESS PRESENTER BILL WOODS: Good morning. Welcome to Meet The Press and another
fascinating week, a week in which the Prime Minister travelled to the heart of the global economic
crisis to meet the US President Barack Obama for the first time. The war on terrorism,
blood-letting on the financial markets and tackling toxic assets dominates discussions.

PRESIDENT OF THE UNITED STATES, BARACK OBAMA (Wednesday): Obviously, there are very few countries
that are closer than the United States and Australia and Prime Minister Rudd's Government, I think,
has shown the kind of vision not just domestically, but on the international stage that we greatly
admire.

PRIME MINISTER KEVIN RUDD (Wednesday): And it's a first-class alliance and it's a first-class
partnership between our two countries.

BILL WOODS: After the Bush-Howard years, there was a lot of focus on the personal relationship
between the leaders, but is it going to save us from recession? Liberal frontbencher, Tony Abbott
is our guest today. And later, is our federal security system up to scratch? We will ask the
international terrorism expert Professor Clive Williams. But first - what is making news in the
nation's papers this Sunday, March 29. The 'Sunday Telegraph' leads with the widening of the spy
storm. The woman at the centre of the defence spy scandal, Helen Liu, also has links to Kevin Rudd
and former Prime Minister John Howard. Water plans - not needed. That's the headline on the Sunday
'Age'. The controversial $700 million north-south pipeline would not be necessary, according to the
paper. And a desalination plant could have been avoided with greater efforts to cut water use.
Spreading the global message - Earth Hour 2009 dominates the front page of 'The Sun Herald'. 2.2
million homes and businesses in Sydney flicked the switch for an hour yesterday and that raised
awareness of the dangers of climate change. And, of course, Kevin Rudd has arrived in London now
for the G20 summit on Thursday. Protests over the meeting have taken place peacefully overnight and
for the latest we cross live to Ten's political editor, Paul Bongiorno. Welcome.

TEN'S POLITICAL EDITOR, PAUL BONGIORNO: Good morning, Bill.

BILL WOODS: Big peaceful G20 protest in London. Do police expect other planned demonstrations to go
the same way?

PAUL BONGIORNO: Well, there are concerns that other protests later in the week and especially when
the summit actually begins, may turn nasty, especially if the more extreme anti-globalisation
elements that we've seen in other big world meetings, come out to play. But the fact of the matter
is that the biggest threat is the threat of terrorism. In fact, the official status is severe.
There's a severe threat of a terrorist attack and the police here in London say that they're
mounting the biggest security operation ever seen in the United Kingdom, especially with 20 world
leaders, including President Barack Obama.

BILL WOODS: The Prime Minister sounded a little pessimistic in New York, Paul, that the G20 could
reach agreement, though?

PAUL BONGIORNO: He did, Bill. He said there's a lot of work to be done and agreement has not yet
been reached. It does seem that all the countries attending agree that there should be stimulus.
They don't agree what sort of stimulus. The Germans say they don't need any more than they've
already got, but there is optimism here in Britain. Senior British ministers today saying that
significant achievements will be made.

BILL WOODS: The Prime Minister has also welcomed the United States' initiative to take a global
economic leadership role. Is it going to make a difference, though, Paul? Can they persuade the
Europeans?

PAUL BONGIORNO: Well, it remains to be seen. There's a lot of good will to Barack Obama. A lot will
depend on the role he plays. He says he wants to be more inclusive, more diplomatic and it will be
interesting to see the way he plays the Chinese. It does seem that the G20 leaders want China to
step up to the breach in the IMF. They've got trillions of dollars in cash reserves and they've got
a very healthy budget surplus. I think the world is looking to China to play a bigger part. Back to
you.

BILL WOODS: Thank you, Paul Bongiorno travelling with the Prime Minister, and right now in London.
But we welcome to the program our guests for this weekend, Tony Abbott. Thanks very much for
joining us.

SHADOW MINISTER FOR INDIGENOUS AFFAIRS, TONY ABBOTT: Nice to be here, Bill.

BILL WOODS: We will get on to the economy in a moment and the G20. Let's get on to the matter at
hand immediately and that's Joel Fitzgibbon's position. Twice this week the Prime Minister has had
to reassure him he still has the job, and, of course, that is a reassurance for voters as well.
What's your position on this?

TONY ABBOTT: Look, Joel has been a nice enough bloke but a pretty inept minister. That's his
problem. We want tough politicians in these very important jobs, not just hail fellow, well met
blokes and Joel has handled the whole controversy on SAS pay very, very poorly. He's obviously at
war with his own department and the failure to disclose these lavish trips that he's had from the
Chinese business woman just shows that the guy is sloppy and that's not the kind of person who
should be in a job as sensitive as the Australian Defence Minister's position.

BILL WOODS: How far down this road does the coalition wish to go in their attack on the minister? I
mean, Kevin Rudd's been photographed with Helen Liu, so indeed has John Howard. So is this going to
open up a Pandora's box?

TONY ABBOTT: Well, look, you know there are a lot of very well networked Chinese business people,
no doubt about that. Joel's problem is, not that he knows Ms Liu, Joel's problem is he's an
incompetent Defence Minister and that he has in a very sloppy way failed to adhere to the
parliamentary rules.

BILL WOODS: If a coalition minister had been in the same position?

TONY ABBOTT: I think there's absolutely no doubt that John Howard in his first term would have
sacked a minister who had been as inept as this. Absolutely no doubt but look, I think there are
also questions for Kevin Rudd. What's the extent of his relationship with Helen Liu? And if he does
have the kind of extensive relationship with Ms Liu that it seems he might, given the reports in
today's paper, perhaps he should be fronting up to this Commission of Inquiry which is currently
looking in to the whole question of Joel Fitzgibbon and these disclosures.

BILL WOODS: That also raises the delicate issues of relations with China which obviously for a
number of reasons we need to cultivate right now and the Prime Minister seems to be doing that.
What does this say to the Chinese, that we consider this particular relationship to be, well, in
some cases, it's said to be inappropriate?

TONY ABBOTT: Yeah, but again, I mean, the problem is not China, the problem is not Ms Liu, the
problem is an incompetent Defence Minister who has been very sloppy in his disclosures and a Prime
Minister who apparently has a pretty strong relationship with the same person that has been, as it
were, the cause of the sloppy disclosures. So that's the issue. Plainly, we want to have good
relations with China, although we also want to be realistic about what that relationship can be.

BILL WOODS: Well, we'll get on to the economy. This week billions will be pumped into bank accounts
of millions of Australians, part of the Government's attempt to tackle the financial crisis. The
Opposition's decision to oppose the package doesn't appear to be popular, and it doesn't just put
it at odds with the Government, it seems to be at odds with most of the western world.

PRESIDENT BARACK OBAMA (Wednesday): So somebody's got to take leadership. It's not just me, by the
way. I was with Kevin Rudd, Prime Minister of Australia today, who was very forceful in suggesting
that countries around the world, those with the capacity to do so, take the steps that are needed
to fill this enormous hole in global demand.

BILL WOODS: Well, Barack Obama's position, Tony Abbott, is not exactly unpopular itself. Are you on
pace with your opposition to at least parts of this plan?

TONY ABBOTT: Look, just two points, Bill. The first is that Kevin Rudd's only in a position to
spend like a drunken sailor because we had 11 years of very good fiscal management thanks to John
Howard and Peter Costello. That's the first point. The second point I make is you can't spend your
way out of recession. You never could, you never will be able to spend your way out of a recession
and if they are going to boost spending, that should be going on projects that boost the long-term
productivity of the country. Kevin Rudd has been talking about infrastructure since he got into
government and there is not a single major project which has started since November 2007 with
Federal Government assistance.

BILL WOODS: But the cash component has been a popular tactic, it seems, with at least the Americans
and certainly other governments.

TONY ABBOTT: Look, you go in a pub on a Saturday night and start handing out $50 bills, you will be
the most popular person in the pub. But at the end of it all, the only person who has got rich is
the publican and everyone else has got a big hang-over.

BILL WOODS: We'll have to get back to that issue as well, Tony Abbott. When we return, we will have
the panel joining us. D-Day quickly approaching for the multibillion-dollar stimulus package to
filter into the public pocket and with the coalition leadership in a bit of a spin right now,
National Senate Leader Barnaby Joyce is putting forward interesting candidates for this top job,
not least of all himself.

NATIONAL SENATE LEADER, BARNABY JOYCE: And come the next election, it won't be about whether Peter
Costello, Malcolm Turnbull, Barnaby Joyce or Elmer Fudd is leading the coalition. It will be about
whether Kevin Rudd has been proved categorically to not have a clue of how to manage the financial
crisis.

BILL WOODS: Welcome back. You're on Meet The Press with Tony Abbott, our special guest this weekend
and welcome to our panel. Fran Kelly from ABC Radio National. Good morning.

FRAN KELLY, ABC RADIO NATIONAL: Good morning.

BILL WOODS: And the 'Sunday Telegraph's Glenn Milne, good morning to you.

GLENN MILNE, THE 'SUNDAY TELEGRAPH': Good morning.

BILL WOODS: While most of the action was overseas of course this week, the Prime Minister was
forced to stamp out some fires from afar. As we mentioned, more fall-out over allegations the
Defence Department had spied on its own minister. It's emerged that Joel Fitzgibbon had failed to
declare gifts from Chinese businesswoman Helen Liu.

PRIME MINISTER KEVIN RUDD: It's right that he apologise. I'm disappointed that he did not make
these declarations back then. I expect better of Mr Fitzgibbon in the future.

GLENN MILNE: Well, Mr Abbott, we will get back to Mr Fitzgibbon in a moment but on the economy,
more generally, as you were discussing with Bill, how do you think we're placed to withstand higher
unemployment?

TONY ABBOTT: Quite poorly, Glenn. The job network faces a looming disaster at a time when even the
Government says we are going to have 100,000 people made redundant over the next few months because
of the Government's inept handling of the current job network tender round, a very large percentage
of job network sites are going to be closing down in the next few months and I'm expecting, because
of my contacts in the job network, I'm expecting well over 1,000 workers to be sacked from the job
network itself.

GLENN MILNE: This is inside knowledge?

TONY ABBOTT: Well, I was the Employment Minister and I still have pretty good contacts in the job
network. This is a first-class muck-up by the Government and this isn't just a belt way scandal.
This is incompetence which is going to directly impact on the lives of hundreds of thousands of
Australians because they have completely mucked up the job network tender. First of all, they've
tendered the whole of the job network business, mistake number one. Second, past proven performance
has been completely ignored, mistake number two. Third, they have put together a tender appropriate
for a boom, not for a bust and this has essentially happened because Julia Gillard has taken her
eye off the ball and left this in the hands of a relatively inexperienced untried junior minister.

GLENN MILNE: OK. Well, let's hope that is not too bad and not too hard on too many people.

TONY ABBOTT: Well, there are 600,000 people, Glenn, who are the clients of the job network and as
I've said, a very large percentage of job network sites are going to be closing down in the next
couple of months. There will virtually be no job network services in these sites in the three
months that it takes to close the existing ones and the 3-6 months that it takes to start up new
sites. I know, because as minister I went through this process myself in 2000. We learnt from our
mistakes. This Government is committing a very, very bad mistake at a time when Australia can
afford it least.

GLENN MILNE: OK. Well, let's go back to Mr Fitzgibbon who might be unemployed in the future, who
knows. The fact is though that his alleged crimes or problems started when he was a shadow minister
because he went overseas on a sponsored trip by Ms Liu, but the fact of the matter is, isn't this
is an endemic problem because governments don't pay for shadow ministers to go overseas. Shouldn't
we change that and shouldn't shadow ministers when they come back not only say who sponsored the
trip, but who they met when they went there?

TONY ABBOTT: Well, look, the problem, Glenn is not that he took a sponsored trip, as you say, lots
of people take sponsored trips. The problem is that he didn't disclose it. That's the problem and
if he had disclosed the trips, we wouldn't have this particular difficulty we'd just be dealing
with an incompetent minister, not an incompetent and a sloppy minister.

GLENN MILNE: Yeah, but shouldn't the Government pay for shadow ministers to go and do good works
overseas?

TONY ABBOTT: I'd be very happy for the Government to pay for me to go overseas and do good works
but - except for the once-a-term study tour over which there's been controversy over the years,
there has not been a program for the Government to pay for shadow ministerial visits. Look, I'm not
saying the Government should pay for shadow ministerial visits. I am just saying that the existing
rules for disclosing these things should be observed and that's Joel's mistake. He hasn't observed
the existing rules.

FRAN KELLY: Tony Abbott, the Opposition was calling for Joel Fitzgibbon's head before. We knew that
he had not disclosed this trip. So what is the sackable offence here? A - you're still saying it is
a sackable offence. Which part of it is? Knowing Ms Helen Liu, renting a property from her, or
failing to disclose these trips?

TONY ABBOTT: Well, it's first of all being an incompetent minister. That is his basic failing. This
is a man at war with his own department...

FRAN KELLY: But just in terms of this story. Where is the incompetence? Because you were calling
for his head before you knew he failed to declare. Where is the incompetence?

TONY ABBOTT: The incompetence was his failure to get on top of the SAS pay scandal and indeed his
apparent misleading of the Parliament in the course of that. Now, of course, it's been compounded
by a second serious, sackable offence, namely, the failure to disclose material matters, in this
case, the lavish trips that have been paid for by Ms Liu.

BILL WOODS: Mr Abbott, we will have to leave that line of question there because we have other
business to attend to and of course, another blow earlier this week for Malcolm Turnbull. A
Newspoll survey showed he was more than 10 points behind Peter Costello as the preferred opposition
leader. Mr Turnbull was approved by just 35% of respondents, with 46% pointing to Mr Costello as
the man to take the party forward. But the member for Higgins would still have a long way to go
before presenting a serious challenge to Kevin Rudd. In the preferred PM stakes, Mr Rudd scored 54%
against 24% from the former treasurer. Mr Abbott, are Malcolm Turnbull's days numbered?

TONY ABBOTT: No, look, Malcolm Turnbull is doing a very good job. It's not easy to lead a new
opposition. Not easy at all. But I think that Kevin Rudd is going to come crashing back to earth
with a thud pretty quickly and believe me, the ineptitude over the job network, 600,000 unemployed
people without proper services, 100,000 newly redundant people without access to proper services,
that's the kind of thing that is going to make this Prime Minister, this inept Prime Minister, very
unpopular very quickly.

BILL WOODS: It may distract attention, but it won't keep Peter Costello quiet, will it?

TONY ABBOTT: Well, I mean, Peter is a Member of Parliament. You're not supposed to be a trapped
monk as a member of parliament. Why shouldn't he speak out? And the great thing about Peter
Costello is that every time he speaks out, he's attacking the Government.

BILL WOODS: But his awareness that his speaking out is destabilising Malcolm Turnbull, or at least
it's reported as such. Surely that has an influence.

TONY ABBOTT: It's not. No, no, but the point is this, what Malcolm wants is all of us out there
attacking the Government, that's what Peter is doing.

FRAN KELLY: Tony Abbott, what this same poll shows is that Peter Costello's speaking out and
attacking the Government has convinced the majority of coalition supporters by a large margin that
Peter Costello is in a better position to beat Kevin Rudd at the next election than Malcolm
Turnbull. Is that what you're hearing and is that what you should be listening to?

TONY ABBOTT: Look, Peter was one of the really stellar politicians of recent Australian times. He
was a really outstanding treasurer and you can hardly blame people at a time when the economy is
stopping dead, for looking at Peter Costello, saying that "Geez, this guy would be so much better
than Kevin Rudd at handling the economy". But as Peter has made crystal clear, he's not running for
anything except to be the member for Higgins. That's what he's being, he's being a good member for
Higgins.

BILL WOODS: Well, Tony Abbott we'll have to leave it at that. Thank you very much for joining us.
As usual, time seems to go very, very quickly. We will have to take a break. The nature of our
relationship with the United States has inspired cartoonists Kudelke in 'The Australian' and Moir
in 'The Sydney Morning Herald' this week, from Obama's lap dog to A-plus student. Kevin Rudd's
position in the alliance is lampooned, but is it all really about Afghanistan?

BILL WOODS: You're on Meet The Press. The Prime Minister has all but said that he will send more
troops to Afghanistan at President Obama's request, which has not come yet, but will the American
plan prove to be effective? We're joined now by the terrorism expert Professor Clive Williams. Good
morning and thank you for your time, Professor.

PROFESSOR CLIVE WILLIAMS, TERRORISM EXPERT: Good morning. Thank you.

GLENN MILNE: Professor, let me ask you first, over in Washington with the Prime Minister there,
President Obama seems to have mentioned for the first time the idea of an exit strategy out of
Afghanistan for the US forces. Does that mean we should have one, too, and what should it be?

PROFESSOR CLIVE WILLIAMS: I think that we will fit in with America's strategy because essentially
we will probably stay as long as the Americans do and I can't see us leaving early. So essentially
we will lock in with that, I would think.

GLENN MILNE: Yeah, but surely if things are going bad in our own national interest, we should have
one of our own, shouldn't we?

PROFESSOR CLIVE WILLIAMS: Well, the problem is of course is that we're part of an alliance
relationship there. That's the primary reason we're there and, as such, inevitably therefore, we
are party to other people's decisions. So I think we may well finesse it a bit, particularly if it
goes on for a protracted period, but hopefully we are looking at a situation over the next few
years where things start to become better and stabilise and then it will be possible to allow the,
or get the Afghans to do more of the activities by building up, for example, the Afghan national
army.

GLENN MILNE: So we're locked in for better or worse now?

PROFESSOR CLIVE WILLIAMS: I think we're there for probably a 10-year period yeah, I don't think it
will be short term thing because essentially, the biggest challenge is to create an officer corps
in the Afghan army. There isn't one at the moment, which means that an army can form in Afghanistan
and dissipate just as quickly as we saw with the Taliban and once you have an Afghan officer corps,
then, of course, you're in a different situation. It's got a bit more life to it and is more
reliable.

FRAN KELLY: Clive, what's your view of this new Obama strategy which includes not just a troop
surge, and there'll be more US troops, but the President is also talking now about a civilian
surge? It seems like that might be where Australia is required to do more, and the Prime Minister
can get out of sending more troops but there will be a requirement for more civilian presence
there?

PROFESSOR CLIVE WILLIAMS: That's right and I think we will come under pressure across the board, I
think we will be asked for more troops and I think probably given the focus on the strategic review
on training I think we can probably get away with providing a few hundred trainers, but obviously
part of the over all package will be aid. I think we could have a much more focussed effort. I
understand that only about 5% of our aid at the moment to Afghanistan goes to Uruzgan province. So
we could have a bigger impact in that province if more of our aid went there and then of course
there's the issues to do with Pakistan, which is really a bigger problem than Afghanistan.

FRAN KELLY: And the fact that the President is now going to devote billions of dollars to Pakistan
directly as part of this, that's the right track? In your view?

PROFESSOR CLIVE WILLIAMS: Well, if the money is directed in the right places. If it's just given to
the Pakistan Government, then it's just going to dissipate and disappear, and as you would know, of
course, Pakistan is one of the world's most corrupt countries. So if you give them money, that's a
bad move. What is really required is a hands-on effort, building public schools for example,
training the military, providing the military with equipment and reducing the prospects that any
money provided will just disappear into people's pockets.

GLENN MILNE: Professor, this whole row about minister Fitzgibbon. How big a domestic security
threat is China to Australia? I'm talking here about internal espionage?

PROFESSOR CLIVE WILLIAMS: Well, China doesn't engage in illegal activities in Australia, but it
does have a very large intelligence effort.

GLENN MILNE: When you say large, Professor, what do you mean?

PROFESSOR CLIVE WILLIAMS: Well, the defector in 2005, Chen Yonglin said that there were up to 1,000
intelligent collectors in Australia. So, it's quite a widespread effort but in particular, it's
relying upon people who have good level contacts when they go back to China, to brief officials on
prospective policies, individuals, what their likes and dislikes are and that sort of thing.

GLENN MILNE: So our politicians should be wary?

PROFESSOR CLIVE WILLIAMS: I think so and I think that any paid travel for politicians is
unacceptable, if it's paid for by other parties. I think that we're not a Third World country. We
can afford to pay for our parliamentarians and politicians to travel if we believe it is necessary.

FRAN KELLY: Is there any situation within the defence intelligence community where it would be
normal and appropriate for a DSD official to be monitoring a minister's laptop, his IT accounts
from your experience?

PROFESSOR CLIVE WILLIAMS: No. That wouldn't be appropriate and I would be doubtful if that did
happen but it certainly is not legal to do that, or lawful to do that. So I would be surprised if
it actually has happened.

BILL WOODS: Professor Clive Williams, thank you very much for joining us this morning.

PROFESSOR CLIVE WILLIAMS: My pleasure.

BILL WOODS: And thank you of course to our panel, Fran Kelly and Glenn Milne. Until next week,
goodbye.