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Meet The Press -

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MEET THE PRESS

INTERVIEW WITH OPPOSITION LEADER BRENDAN NELSON AND REPORT BY TEN US BUREAU CHIEF NICOLE STRAHAN

29th July 2008

DISCUSSIONS ABOUT GIPPSLAND BY-ELECTION, EMISSIONS TRADING SCHEME, PETROL AND GROCERY PRICES,
BELINDA NEAL, TAX CUTS, LIBERAL LEADERSHIP, US PRESIDENTIAL RACE.

MEET THE PRESS PRESENTER GREG TURNBULL: Hello and welcome to Meet the Press. This morning, the
outcome of a very large-scale opinion poll in the electorate of Gippsland. Plus - petrol, petrol
everywhere, but it can't last forever and almost everyone agrees we're going to have to pay a lot
more for it.

OPPOSITION LEADER BRENDAN NELSON (Monday): Prime Minister, what has become of the blowtorch that
the Government was going to apply to the oil-producing countries? Doesn't this prove that the
Government, when it comes to petrol prices, is all blow and no torch?

PRIME MINISTER KEVIN RUDD (Monday): What we have here quite plainly with this new fear campaign on
emissions trading is this - we have the return of the Kyoto sceptics.

GREG TURNBULL: Opposition Leader Brendan Nelson is our guest this morning. But first, what the
nation's press is reporting this Sunday June 29. The Melbourne 'Sunday Age' says "Gippsland sends
Rudd a message". The rural Victorian seat was easily retained by the Nationals with a by-election
swing of around 7% against Labor.

NATIONALS LEADER WARREN TRUSS (Last night): What the people of Gippsland have done tonight is to
send a clear message to Kevin Rudd and his Government that they've got to govern for all
Australians as they promised they would on election night. The people of regional Australia are
sick of being left out of the equation and we're going to stand up and fight. We want our fair
share.

GREG TURNBULL: In Sydney the 'Sun-Herald' says "Downer set to wind up political career". The former
foreign minister Alexander Downer is tipped to pull the pin on his Adelaide Hills seat of Mayo,
forcing another by-election. The Melbourne 'Sunday Herald Sun' says, "Critics slam Treasurer over
tax relief as prices soar". Wayne Swan says relief is on the way with the new financial year,
starting Tuesday. Well, today we'll break with tradition and introduce our panel from the top. With
us is Alison Carabine from Radio 2UE. Good morning.

ALISON CARABINE, RADIO 2UE: Good morning.

GREG TURNBULL: And Steve Lewis from News Limited. Good morning, Steve.

STEVE LEWIS, NEWS LIMITED: Good morning, Greg.

GREG TURNBULL: And our guest this morning, with his thoughts on the by-election among other things
is the Opposition Leader Dr Nelson. Welcome to the program.

BRENDAN NELSON: Good morning, Greg, and welcome to the program for you.

GREG TURNBULL: Thanks very much. The Gippsland by-election - a big result for the Nationals, what
about the Liberals and what does it mean for your leadership?

BRENDAN NELSON: It's a significant result, the people of Gippsland have chosen to send a person to
Canberra who's actually going to stand up to for the people of Gippsland, it sends a message to Mr
Rudd that Australians don't want to be taken for granted. The cost of living expenses, particularly
petrol and groceries and home interest rates and jobs in the Latrobe Valley in particular are
things Mr Rudd has been taken for granted. It's an extraordinary result to have a 7% swing against
Mr Rudd, only 7 months after he has come to election, which would be one of the largest swings
against a newly elected Government, I think, since Federation.

STEVE LEWIS: Dr Nelson, this will be, from your point of view, seen as another test of your
leadership. You would argue this would bolster your leadership. But there is renewed speculation
that some of your colleagues will be counting the numbers over the winter recess. Are you confident
that when Parliament returns in late August that you will still be the Liberal Party leader?

BRENDAN NELSON: Steven, it's absolute nonsense. The Liberal Party, not having run in Gippsland for
25 years, not having party members or branches, we ran a terrific campaign, had a great candidate
in Rowan Fitzgerald, we've polled more than 20% of the vote. I expect both the Liberal and National
Party vote to strengthen with pre-polls and postals as they're counted, and the most important
thing is that Mr Rudd himself has now got to face up to the fact that you can't go around the
country promising people all kinds of things and not actually delivering. As we know, Mr Rudd is
all backswing, no follow-through. The people of Gippsland have woken up to this. What it really
means now for Mr Rudd is he's got to start running around the country, approaching a whole range of
issues without focus, without strategy, without priority, and start to focus on the real things
that are worrying real Australians - petrol, groceries and interest rates.

STEVE LEWIS: Can I ask you why were you missing from the ballot paper, why was there no mention of
Brendan Nelson in any of the material that was distributed over the past month or so?

BRENDAN NELSON: I visited the electorate of Gippsland on four occasions during the campaign,
including the day before the election day. Neither our candidate nor the National Party candidate
needed to do anything other than stand on their own two feet. We ran very strong local election
campaigns. On the other hand, the Labor candidate wrapped his arms around Mr Rudd who featured very
heavily in the campaign down there. I noticed that the Labor Party actually pulled the plug on Mr
Rudd on the day of the election itself. The end result of all of this is we've seen a 7% swing
against the Government. This is a very serious wake-up call for Mr Rudd.

ALISON CARABINE: But Dr Nelson, the Gippsland result notwithstanding, your opinion polling numbers
have been low since November. You told your party room this week that you expect them to remain
that way for some time to come. How many more bad sets of numbers can you sustain as a leader? Is
it a few more, as suggested by Tony Abbott?

BRENDAN NELSON: As we often say, the only poll that counts is the poll taken on election day. We
had an election yesterday in Gippsland and we've had a 7% swing against Mr Rudd and the Labor
Government. Australians chose a government in November last year. It was a time when the economy
was in absolutely first-rate condition. We did have a sense of confidence in the way Australia was
going. Seven months later, only seven months into it, Australians realised that business and
consumer confidence have plummeted. Petrol, groceries, interest rates, all of these things have
increased. We know that from the 1st of July, for example, Australian families are going to be at
least $30 a week worse off, even after Peter Costello's last tax cuts, and it will take a little
bit longer yet before Australians generally decide that perhaps Mr Rudd is not performing up to
their expectations enough to see any substantial change in polls themselves.

ALISON CARABINE: But what's the point of no return for a political leader in the opinion polls? At
what point should a leader stand down for the sake of his or her party?

BRENDAN NELSON: Mr Rudd, in Adelaide, just over a month ago, said that he couldn't do any more
physically for the Australian family budget. In other words, he's a quitter. When the going gets
tough, he quits. He chucked in the towel and he said after less than six months in government he
couldn't do any more for Australian families. I can assure you I've taken on the leadership of the
Liberal Party, of the Opposition, I'm determined that I will lead the Opposition to the next
Federal election, I am very resilient. We are already seeing, by virtue of the Gippsland
by-election result and the way that Australians are progressively waking up to Mr Rudd, as we
progressively roll out policy over the next 2.5 years, you will see we'll have an inspiring and
attractive alternative for Australians, which will give them confidence in the way this country
needs to be led and to be governed. Mr Rudd is equating popularity with leadership. There's quite a
difference.

GREG TURNBULL: Dr Nelson, if I can borrow your analogy that Kevin Rudd is all backswing and no
follow-through, didn't he drive you into the rough in Parliament through the week when you said to
him he was watching petrol prices and not doing anything about it, watching grocery prices, not
doing anything about it. And then he had this response which hurtfully you will recall. Let' have a
look at it.

KEVIN RUDD (Thursday): Brendan, if I was you, mate, when it comes to watching, I'd be watching your
back.

(LAUGHTER)

KEVIN RUDD: Watching your back very closely over the next two months.

SPEAKER: The member on the left will come to order.

KEVIN RUDD: Not just there. Up there, up there, and even over here, Joe. Even over here! You've
been a bad boy, Joe.

GREG TURNBULL: I don't know if Joe Hockey's been a bad boy, Dr Nelson. But let's talk about another
one of your boys in the back bench, Alexander Downer. It's suggested he'll quit Parliament very
soon. What do you know of that and what do you think about it?

BRENDAN NELSON: By the way, Greg, firstly, on that, that's exactly what Australians have had enough
of. They are struggling at $1.70 a litre, they're struggling with interest rates that have
increased substantially under the Labor Government, they're struggling with groceries. Pensioners
get one mention in a 30-minute Budget reply, and then Mr Rudd, to deflect attention away from that,
wants to ridicule members of the Opposition. That's the real issue there. As far as Alexander
Downer is concerned he's done enormous service for the people of Mayo and for Australia - the
longest-serving foreign minister, as we well know. I would expect that he will make a decision
about his future in the not too distant future.

STEVE LEWIS: Surely, Dr Nelson, he's told you? Is the Member for Mayo going or staying? Surely by
now you will know.

BRENDAN NELSON: Well, you'll find out in due course.

STEVE LEWIS: What does that mean?

ALISON CARABINE: As soon as next week?

BRENDAN NELSON: Well, you guys need to lighten up a bit.

(LAUGHTER)

STEVE LEWIS: It's a fairly serious issue.

BRENDAN NELSON: Of course it's a serious issue, and Alexander Downer and his family, his wife,
children, his extended family, have made an enormous contribution to this country. He will make a
decision in due course about his future.

STEVE LEWIS: That sounds like you are preparing to wave him goodbye. Is that the case?

BRENDAN NELSON: Neither he nor I will are going to be verballed by anyone as to when he makes that
announcement.

GREG TURNBULL: If he does go, and there's a by-election in Mayo, shouldn't Peter Costello either
decide whether he's staying or going and have a by-election at the same time?

BRENDAN NELSON: Well, no, he shouldn't. Again, every individual member of Parliament - I go back.
Those of us selected in November last year - it is a privilege to be a member of the Parliament. It
is an honour to do so. I would suggest to you that Alexander Downer and Peter Costello, between
them, have made arguably the greatest contribution along with John Howard over the last 12 years to
the nation's economic and social development. They have earned the right to make a decision in
consultation with their families and their electorates and they will do so in due course. The real
issue - we've got to this part of the interview, the real issue is the member for Robinson, Belinda
Neal, who was also elected in November last year, and Mr Rudd has not had her step down from the
Labor Party caucus, still has her in the Government and we learnt today that she has still not been
interviewed by the police. I'd suggest to you that's the real issue in relation to members of the
Parliament.

GREG TURNBULL: We may well come back to that. When we return - happy days are here again, here come
the tax cuts. This week saw a ceremonial farewell from the political stage for the Australian
Democrats. After a 30-year Senate presence, the party Don Chipp created to "keep the bastards
honest", has run out of political capital.

SENATOR ANDREW BARTLETT: Life's not funny. Life's a bitch sometimes.

SENATOR NATASHA STOTT DESPOJA: I think you need to say it in a Don Chipp voice. "Let's make
bastards history."

SENATOR LYN ALLISON: Thank you to all the colleagues in this place, and goodbye.

(APPLAUSE)

GREG TURNBULL: You are on Meet the Press, with Opposition Leader Brendan Nelson. The new financial
year starts on Tuesday and with it the tax cuts that won virtually bipartisan support at the
election. Here's how the Treasurer trumpeted their arrival.

TREASURER WAYNE SWAN (Monday): Next Tuesday week is a big day for working families in this country,
the day we begin tipping the scales in their favour. A typical young family will be $51.54 per week
better off as a result of Budget initiatives.

GREG TURNBULL: Those famous working families might also be looking forward to sharp increases in
the price of petrol under an emissions trading scheme. Dr Nelson, isn't it just logical that petrol
has to be included in an emissions trading scheme to make any sense, and doesn't that mean we're
going to have to get used to much higher petrol prices?

BRENDAN NELSON: There's a couple of things, Greg. Firstly, adjusting to climate change is something
that we must do. We must be a part of a genuinely global solution. We also need to go into it this
with our economic eyes absolutely wide open. We are Liberals - we generally believe in market
solutions, and that's why we supported an emissions trading scheme in government, and we believe
that's the way to go forward. But in terms of also principle, it's extremely important,
particularly when petrol is around $1.70 a litre, that the Government in its policies and
implementing its policies in relation to climate change, does not as a direct result of the
introduction of them, increase the price of petrol, and it makes sure that there is also
appropriate care and attention and compensation provided to families and pensioners, of course, in
relation to electricity. There are different ways of achieving that, whether petrol is in or
whether petrol is out. What we will be doing is carefully examining Ross Garnot's report, he's the
key advisor to the Government. We will also then examine the green paper, have a comprehensive
approach to climate change, and the one thing I must emphasise as the Leader of the party, is we
will do what is right for Australia. We've got to get this right for our country. We cannot in
ourselves solve the problem of climate change, but we can do enormous damage to our environmental
and our economic future if we get this wrong. My real concern at the moment is that the Government,
internally, is very much like the Whitlam government -it's confused, it's disordered, there is deep
splits and divisions within the Government, within departments and individual ministers about the
way to go. That is my primary concern, but I emphasise again, we must put Australia first.

ALISON CARABINE: But Dr Nelson, climate change is such a momentous environmental and economic
challenge, is it not deserving of a bipartisan approach?

BRENDAN NELSON: Alison, I know there are people who would think yes, it should have a bipartisan
approach. But the way our Westminster system works best is when there is very careful scrutiny
given to things that governments choose to do. We may end up in a situation where both the
Government and the Opposition actually do take the same approach, but we need to carefully examine
the science in relation to it, we've got to put Australia first and most importantly for us in the
Coalition, believing in lower taxes, believing in protecting people on petrol and on electricity,
and making sure that we don't have jobs and industries leave this country, I suspect there's a high
probability that we will not support what the Government may actually choose to do.

ALISON CARABINE: Do you think that Kevin Rudd blundered by promising an emissions trading scheme by
2010? It's a very tight timetable, 2010 an election year. Will that give you a bit of a sniff at
the next election?

BRENDAN NELSON: Introducing an emissions trading scheme and adjusting to climate change will make,
for example, the introduction of the GST look like a walk in the park, and that was an
extraordinarily complex process, economically, technically, and indeed politically. We were quite
concerned when we saw Mr Rudd during the election campaign announce that it would be introduced by
2010. I am very concerned, I am very concerned about Australia's best interests not being served by
them trying to ram it through. Because if we get this wrong, if it is not right, we will suffer,
and suffer not just for one or two years, we will suffer for more than a decade.

STEVE LEWIS: Just to clarify, did you say earlier you expect the Coalition will end up not
supporting the Government on its preferred ETS model?

BRENDAN NELSON: Steve, you probably should listen more closely to what I say. I said it is possible
in the end - and we don't know yet - because, as I said, we will go through this methodically, we
will do it in an orderly way, we will examine Ross Garnot's report, we will examine the green paper
which the Government releases, we will have a considered and comprehensive response to climate
change. It is possible that in the end we may end up having the same position as the Government,
but we may not. I would expect from the way the Government has been behaving that in fact we'll
have a different position in some areas in our approach to climate change.

STEVE LEWIS: Would you support a situation like New Zealand has recently adopted, where petrol is
deferred, say, for the first several years of a carbon trading scheme coming in? Is that one option
that you would support?

BRENDAN NELSON: We examine all options. I note what the New Zealanders have done. But our
fundamental principle, with Australians at breaking point now, at $1.70 a litre on petrol for
example, pensioners trying to live on $273 a week with groceries and rents going through the roof,
our fundamental principle is to protect them in the introduction of climate change. And there are
different ways of doing it. The New Zealanders have decided to defer, there are other countries
that are deferring for longer periods, other countries that'll put it in. I will announce our
policy when we have given careful thought and comprehensive consideration to it. I'm not going to
be verballed into anything else.

GREG TURNBULL: Just to change the subject for a moment, Kevin Rudd is going back to Japan, within
the next few weeks, for the G8 meeting I think. He was originally going to Korea, now not going to
Korea. Do you think that's another diplomatic gaffe?

BRENDAN NELSON: I find it staggering that South Korea, for example, which is Australia's fourth
largest trading partner, that is in the process of negotiating a very important free trade
agreement with Australia, that Mr Rudd has now deferred his visit to South Korea. I mean, apart
from anything else, Mr Rudd, when he was in Washington in early April, said that the six-party
talks in relation to North Korea should be expanded to include Australia as some sort of security
arrangement. You would think that he would follow these things through. I don't understand why Mr
Rudd is progressively upsetting Australia's strongest allies in Asia, and I noticed when he had his
announcement of an Asian union, for example, he didn't even include South Korea in it. So I'm quite
concerned about the way in which he's been approaching not only Japan, but also now South Korea.
Australia's key security interest in North-East Asia, apart from the our trading interests, rely
very on South Korea and Japan, and I think that Mr Rudd should reconsider his decision not to go to
South Korea as he was.

GREG TURNBULL: Dr Nelson, we are out of time. Thanks very much for joining us on Meet the Press.

BRENDAN NELSON: Great to see you. Thanks, Greg.

GREG TURNBULL: Coming up after the break - a progress report on the US presidential election. And
our cartoon of the week is from syndicated cartoonist, Zanetti. He has Belinda Neal fuming at the
stake with one of her tormentors saying, "Um, shouldn't we be talking more about petrol?" And the
other responding, "Yeah, throw on some petrol."

GREG TURNBULL: You're on Meet the Press. The marathon that is the American presidential race is now
a two-man contest. Barack Obama has now appeared publicly with Hillary Clinton for the first time
since she withdrew her bid, a show of unity the Democrats hope will galvanise support for Obama in
his new battle with Republican John McCain. This progress report on the contest for the world's top
job comes from our US bureau chief, Nicole Strahan.

NICOLE STRAHAN: Barack Obama has enjoyed a meteoric rise from a relatively unknown first-term
Senator from Illinois to a contender for the world's most powerful job.

DEMOCRATIC PRESIDENTIAL CANDIDATE BARACK OBAMA: Tonight we mark the end of one historic journey
with the beginning of another, a journey that will bring a new and better day to America. Because
of you, tonight I can stand here and say that I will be the Democratic nominee for the president of
the United States of America.

NICOLE STRAHAN: When the 46-year-old became the first black man to lead a major party to a US
presidential campaign, more than 17,000 people were there to see it, packed into the same venue
Republicans will use to officially select their nominee in September.

BARACK OBAMA: America, this is our moment. This is our time.

NICOLE STRAHAN: A time that's attracted unprecedented media interest from around the world and also
seen a woman come within striking distance of breaking through the ultimate glass ceiling. But
somehow Obama beat a rival many considered to be the inevitable nominee. When Hillary Clinton
announced her much-anticipated candidacy in January 2007, she made a confident prediction.

HILLARY CLINTON: I'm in. I'm in to win.

NICOLE STRAHAN: If this race for the White House has proven one thing, there are few certainties in
politics. After a gruelling six-month primary season, the former first lady's run was over. There
would be no second Clinton in the White House. But it still took the New York Senator three days to
endorse her one-time rival and officially end her campaign.

HILLARY CLINTON: Today, as I suspend my campaign, I congratulate him on the victory he has won and
the extraordinary race he has run. I endorse him and throw my full support behind him.

NICOLE STRAHAN: The primary process attracted a record number of people to the polls, more than 35
million turning out to have their say on who should be the Democratic nominee. 18 million of them
voted for Clinton. Now the question for the party is will they vote for Obama on November 4? Polls
indicate as many as 28% of Clinton supporters would prefer to back Republican John McCain rather
than switch to Obama.

MAN: She should take this to Denver and fight about having her delegates count in Florida and
Michigan and she should be the nominee.

WOMAN: She's clearly the best person to lead America out of the mess we've been on the world stage.

NICOLE STRAHAN: One way to overcome that would be to offer her the vice-presidential spot on the
Democratic ticket, but that is by now means certain.

BARACK OBAMA: It's not one that you want to make in the heat of the moment right after you got out
of a nomination, so we are going to take our time. Senator Clinton would be on anybody's short
list, obviously.

KATIE COURIC, CBS NEWS PRESENTER: So you're not ruling her out?

BARACK OBAMA: No.

CLINTON COMMUNICATIONS DIRECTOR HOWARD WOLFSON: It's not a job she's seeking and it's not a job
she's campaigning for.

NICOLE STRAHAN: But then again, potential VPs rarely publicly declare they want the job. The son of
a Kenyan father and a white mother from Kansas, Obama's campaign message has been about change, but
is America really ready for a change that includes a black man as president?

MAN 2: I think that he transcends the race - he's half white - he's just the kind of candidate who
could unite the country.

MAN 3: The dream has really come alive.

NICOLE STRAHAN: It will live on if he beats Republican John McCain. As the Democrats battled it out
over the nomination, the Vietnam veteran was already well into his general election agenda.

REPUBLICAN PRESIDENTIAL CANDIDATE JOHN McCAIN: He doesn't trust us to make decisions for ourselves
and wants the government to make them for us. That's not change we can believe in.

NICOLE STRAHAN: If McCain wins, he'll be 72 by the time of the inauguration next January. That
would make him the oldest first-term president. To reach the White House however, he'll have to
find a way to distance himself from another high-profile but increasingly unpopular Republican,
George W. Bush. In some opinion polls he has the highest disapproval rating of any modern US
president. That provides plenty of ammunition for the Democrats. Barack Obama has long painted a
vote for McCain as a vote for four more years of the Bush Administration.

BARACK OBAMA: The question for the American people is, "Do we want to continue George Bush's
policies?" The answer is no.

NICOLE STRAHAN: Expect to here more such rhetoric between now and polling day, still four months
away.

GREG TURNBULL: Nicole Strahan reporting there from our US bureau. We'll have more on the US
presidential race in the weeks and months leading up to that very big Tuesday in November. Thanks
to our panel, Alison Carabine, from Radio 2UE, and Steve Lewis from News Limited. Until next week,
it's goodbye from Meet the Press.