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The Great Debate -

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TRANSCRIPT OF 2010 ELECTION DEBATE

NATIONAL PRESS CLUB

CANBERRA

25 JULY 2010

Subject: Election Debate

SPEERS: Good evening and welcome to the National Press Club in Canberra for 2010 Election Leaders
Debate. Please make welcome the Prime Minister, Julia Gillard, and Opposition Leader, Tony Abbott.

My name is David Speers, I'm the Political Editor of Sky News Australia and tonight we have three
of the country's best journalists on our panel. To pose questions to the Leaders please welcome
Chris Uhlmann from the ABC, Laura Tingle from the Australian Financial Review and Malcolm Farr from
the Daily Telegraph.

Well, all of us have to vote on August 21 and tonight we want to help you decide who should be
leading Australia. Both parties have agreed on a set of rules governing tonight's debate but we
want this to be a real debate as well, where we can hear what both of you stand for and the
direction you'd like to take Australia in. Now the Opposition Leader won the coin toss and decided
to send Julia Gillard in to bat first. So Prime Minister, your opening statement.

PM: Thank you very much David. Thank you Tony. In 27 days time Australia will make a choice. I
believe it's a choice between Australia moving forward or going back and I know you've heard me say
those words before so tonight I'm just going to take a few minutes of your time to explain what I
mean by those words.

I think Australia is a great country. The best country on earth, but it can be a better country and
that's what I mean by moving forward. All of that starts with a strong economy, with a prosperous
Australia and that's why when the global financial crisis threatened this country we did what we
needed to do to protect Australian jobs. Now that was the better economic plan and for the future
we have the better economic plan. A plan to bring the Budget back to surplus in 2013, three years
earlier than scheduled and before any other major advanced economy in the world. An economic plan
where we've given the mining industry certainty and we will cut company tax because that will make
a big difference for jobs in the future.

A better economic plan where we can increase superannuation for more than eight million hard
working Australians. A plan to support small business and a plan to build the National Broadband
Network because that is so important to the jobs of the future and how we will live in the future
and with a strong economy then we can provide the services that families need - great schools,
decent health care. I'm absolutely passionate about making sure every Australian child, every
child, gets a first class education. That's why I will deliver a national curriculum, why I will
keep investing in the quality of the teachers standing in front of that classroom, why I will keep
rolling out our Trades Training Centres because they're so important, just so important, to getting
the real skills that kids need for life and for work and it's also why I want to invest in a GP
After Hours Hotline - so you can find a doctor when you need one. That's why I will train 1,300 new
GPs and 3,000 new nurses. Great services, good schools - that I believe takes us forward.

I also believe it takes us forward if we have a sustainable Australia, not a big Australia and
that's why, that's why I want to make record investments in solar and renewable technologies. I
believe in strong border protection and cracking down on people smugglers. I also believe this is
not a time for us to turn back. If you want to lead this nation, you've got to have your eyes on
the road ahead, not in the rear vision mirror. That's what I stand for.

SPEERS: Prime Minister, thank you. Mr Abbott, your opening statement.

ABBOTT: Thanks David and thanks Julia. This election is about a fair go for families struggling
with cost of living pressures. It's about a government that you can rely on to deliver. It's about
respect for democratic process.

My wife Margie and I know what it's like to raise a family, to wrestle with a big mortgage, with
grocery bills, with school fees but I can deliver for Australian families because I have been a
senior Minister in an effective Government. In Government I started the Green Corp where young
Australians worked with the environment. I massively expanded Work for the Dole and as Health
Minister I got bulk-billing to record levels, put an extra $10 billion into public hospitals and
expanded Medicare to cover allied health professional treatment including dentistry.

I tell people what I believe and I can deliver. If you elect the Coalition, you will end the waste,
you'll repay the debt, you'll stop the taxes and you'll stop the boats. That is my pledge. That is
my action contract with the Australian people.

Above all, you'll get a better run economy and a strong economy is the foundation, the necessary
foundation for a fair go for families, carers, seniors, farmers, veterans and small business
people. Right now our future is at risk for a Government which is all clever politics but
absolutely hopeless at running the country.

They're wasting billions on pink batts and overpriced school halls. They're borrowing $100 million
every single day and they're threatening our economic future with their great new big tax on
mining.

This Government is so hopeless that just a month ago, in panic, they sacked their own Prime
Minister. In the Prime Minister's own words, the Government has lost its way but Julia Gillard
can't talk about her record because things have gone from bad to worse since she took over.

There's the boat people fix that got lost somewhere in the Timor Sea and there's the climate fix
which is just another talk fest. It's not give enough, it's not good enough and it will just get
worse while a bad Government thinks it can spin its way out of trouble.

There is a better way. If you elect the Coalition, you'll get a fair dinkum paid parental leave
scheme, you'll get a standing green army, 15,000 strong, to work on land care projects. You'll get
community run hospitals with more beds and you'll get schools run by parents, not bureaucrats. So I
ask for your support to end the waste, to pay back the debt, to stop the tax and to stop the boats
because that's what the people of Australia have a right to expect from Government.

SPEERS: Tony Abbott, thank you, before we get to questions from our panel, I just want to kick off
with a couple of the broad themes you've both raised there. Prime Minister, first to you. When you
did bring down Kevin Rudd a month ago, you acknowledged that it was because the Government had lost
its way and you said there were three areas that needed to be fixed - asylum seekers, the mining
tax and climate change. But on asylum seekers, boats are still arriving. There's still no real
solution there. On the mining the tax, big sections of the mining industry are still deeply
concerned about the tax and on climate change you've proposed another talk fest. Have we really
moved forward?

PM: I believe, David, we have moved forward and let me go through some of those issues. What I
wanted to do was bring certainty to the mining industry and now we have an arrangement where the
biggest miners in this country have agreed to pay more tax. Now Tony said he doesn't want to take
it but that extra tax, that $10.5 billion, will support vital things like cutting company tax,
growing the jobs of the future, investing in superannuation, investing in infrastructure and
supporting small business. Yes, there's a process to work through, led by a leading Australian
miner, Don Argus, and of course on asylum seekers and border protection, I want to strengthen
border protection. I want to make sure we don't stop boats when they're in our waters. I want to
make sure they don't leave foreign shores to get here. Now that's going to take some time of
working through with our regional partners and we've started that process and at the same time I've
invested in increased surveillance and other equipment to work with Indonesia - one of our region
partners.

Now, on climate change, once again I believe in climate change, I believe it's real and I think
Australians can help me here, help me, help the nation, help their fellow Australians work through
to a community consensus about a long-lasting solution but in the meantime, in the meantime we will
make sure that there are no new dirty power stations built. We'll make sure we invest $1 billion in
bringing the clean energy of the future from remote parts of the country - the north of Queensland,
Western Australia, the Cooper Basin in South Australia - to our very own homes. We'll invest to
make sure that we've got a more modern car fleet, greener buildings and we'll be rewarding
companies that are early movers to getting things right. These are big steps forward and part of my
plan for a prosperous Australia and for a sustainable Australia, not a big Australia.

SPEERS: Tony Abbott, the Liberals have churned through three leaders in three years. You were
installed as leader by just one vote in the party room at the end of last year. You yourself have
changed your position on things like WorkChoices and on climate change, on the emissions trading
scheme, and you described yourself as a bit of a weather vane on this at one point. And you've also
acknowledged that you don't always tell the gospel truth. So how can we be sure what you will do in
government?

ABBOTT: Because, David, I am giving people very, very clear commitments. Unlike the Government, you
won't get a lot of waffle. You won't get a whole lot of proposals that aren't fair dinkum. I mean,
on the boats, the former Coalition Government stopped the boats. The current Government started the
boats. It will take the Coalition to stop the boats again. If Julia was fair dinkum about stopping
the boats, she wouldn't be pursuing this fanciful deal with East Timor, she'd pick up the phone to
the President of Nauru because he wants to reopen the Australian-built detention centre there, and
he says that he can do it in a matter of weeks, not years.

On the mining tax, well, my position is absolutely crystal clear. It's a bad tax. It will make our
most successful industry uncompetitive. It will give us the highest mining tax rates in the world.
Julia says that, Julia Gillard says that the big miners accept it. They don't accept it, they just
think it's the best deal they can get from a bad government, and certainly the small miners, who
are locked out of the deal, they dislike it so much they're about to start their ad campaign again.

Now, on climate change, look, there are a lot of different views that people have on climate change
and how best to deal with it. But we have a clear and definite policy, not a talkfest, but a clear
and definite policy which can deliver the five per cent greenhouse gas reduction target by 2020.

SPEERS: Alright. Let's get into specifics from our panel of journalists. The first question comes
from Chris Uhlmann.

UHLMANN: I've got a question to you both but Ms Gillard first though. Do you think that
occasionally the courage to stand against the mob is a sign of a true leader, and if so, can you
both give us one example of how you demonstrated that in this campaign.

PM: I think it's very important that when you lead, that you do show the courage of your
convictions and you lead. And I think, Chris, I'm entitled to point to my track record and say I
have delivered some reforms that were pretty hard, pretty disputed at the time.

My School would probably be the biggest example the public would be aware of. It wasn't easy
staring down a strike by teachers to make sure we delivered the kind of transparency that parents
want. I thought it was the right thing to do and I got it done. Perhaps less transparent to the
Australian people: getting new occupational health and safety laws. Laws around the country.
Businesses have been complaining for 30 years that they have different obligations in different
states and at the same time not every individual worker had the same safety standards. Now, I have
delivered that.

Thirty years - on the day we delivered it there were some public servants that had tears in their
eyes because they spent all their working life waiting for someone to deliver that reform. Wasn't
easy, but I got it done. And what I think that shows is if you believe in something passionately,
then you will work through.

But Chris, I don't make any apology for setting up processes that enable me to bring the Australian
people with me. If we are going to have deep and lasting reforms, like reforms about climate
change, can't be hostage to swings and roundabouts, to a new Opposition leader, to a shattering of
political consensus in Parliament House, not far from where we are now. If we are going to have
deep and lasting change, and I do want Australians to come with me - and that's what you have seen
when I announced the climate change policy, to give just one example. So leadership is about
courage, it's about conviction and it's about persuasion to get people to come with you.

SPEERS: Prime Minister, can I just pull you up on the main example you cited there of your courage
on My School. You had overwhelming popular support for that. It was the unions who were the only
ones opposed.

PM: Well, it still required, let me tell you, standing up in some not so easy times to get it done.
And I would say this: if delivering My School was actually so easy, given people have talked about
transparency in this country, wanting to know what was happening at their local school for decades,
why hadn't it been done before? I got it done, got it done by showing the courage of my convictions
and pushing through, and it's an important reform because for the first time ever in this country,
school by school we can see how those schools are going and we can check whether the kids in them
are getting a great quality education. It was worth fighting for.

SPEERS: Mr Abbott, your response to that?

ABBOTT: Well, thanks David. Thanks Chris and, if I may, the Prime Minister doesn't have a lot to
talk about after three years in government. I think that anyone who watched my record in government
would say that there were a whole host of issues that I drove, not all of them popular. Just to
take one issue that I intend to drive now and in the future, let's take paid parental leave. This
is not just a visionary social reform but it is an important economic reform too. It will not only
give women the real choice that they need and have been denied for too long, it will give families
struggling to pay the mortgage the money that they need at a time when they are most vulnerable and
in the long run it will be of help to Australian businesses.

The Intergenerational Report of my friend and former colleague, Peter Costello, said that if we are
to meet the demographic challenge, we need to address the three 'P's: population - paid parental
leave helps; productivity - again, paid parental leave helps very much because it keeps experienced
workers connected to the work force; and participation - what could be better constructed to ensure
that we keep 50 per cent of our talented workforce engaged in work. So I think paid parental leave
is something that I have pursued just in the last few months. It hasn't always been popular. It's
still not entirely accepted out there in the community. The Labor Party certainly doesn't accept
it. They'll fight it because they think their rebadged baby bonus is enough but I am very happy to
stake my political future on this visionary social change and important economic reform.

SPEERS: Alright, the next question comes from Laura Tingle.

TINGLE: I've got a question for you, Mr Abbott, and it goes to that point you've just been making
about the Intergenerational Report. The Coalition in government actually pursued big population
policies, partly driven by that report. Everything from the baby bonus through to luring overseas
students here with a promise of permanent residency. It was this policy that produced the 300,000
peak in population in 2008 in net migration. Isn't your policy announcement today just really
undoing the damage you caused on population policy in government?

ABBOTT: Well, far from it, Laura. What we did today was level with the Australian people. For most
of the first week of the campaign, the Prime Minister has been talking about population but you are
not fair dinkum talking about population if you are not prepared to discuss immigration. Now, we
know that immigration is very important to any discussion of population because two thirds of our
population increase is driven by immigration. What we had was a big increase in immigration numbers
under the current Government from about 200,000, when the Howard Government left office, to 300,000
under the current Government. This is unsustainable and what I did today was announce that over the
first term of an incoming Coalition government, we would bring immigration down to 170,000 a year.
Now, we don't want in any way to hurt the economy so what I said today was that we would keep
numbers in the employer-nominated visa categories because obviously we want expanding business, and
that means giving businesses the people and the skills they need. But let me conclude where I
begin, Laura: we have nominated what we think is the right number for Australia going forward and I
challenge the Prime Minister to do likewise.

SPEERS: Tony Abbott, just to pull you up on that, getting back to Laura's question, wasn't it the
Howard Government that set the laws in place that started to allow, particularly the foreign
students that you seem to be concerned about, to come in?

ABBOTT: It's the current Government which has presided over immigration numbers of 300,000 a year
and something needs to be done about an unsustainable rate of increase.

SPEERS: Prime Minister, your response to that?

PM: Well thank you and I'm glad Tony used the word 'fair dinkum'. Let's be fair dinkum, let's look
at immigration numbers, in 2008 300,000, that's true and then we brought the immigration numbers
down as the economy obviously was dealing with the impact of the global financial crisis. Down to
230,000. Then for the year we are in now, they are predicted to be 175,000 and then next year,
predicted to be 145,000. That's net migration. So the trick here, and I think Tony should really
reveal the trick - the trick here, is Tony today has promised the Australian people what I'm
already delivering to the Australian people. It's pretty clever, but it's a trick. And of course we
cracked down on immigration rorts that we inherited from the Howard Government. Rort No.1, that you
could get on a skilled Visa, a worker, you paid less than an Australian worker to do the same job.
We cracked down on that. Rort number 2, the shonky operators that we saw in the international
education market, we have cracked down on that and we have broken the nexus between coming here to
study, and getting to stay. These were rorts left over from the Howard Government, and if Tony
wants to be fair dinkum, I think he needs to be fair dinkum about that too.

ABBOTT: But Julia, Julia why didn't you tell us all this last week when you started a population
debate and claimed that immigration and population had nothing to do with each other?

PM: Well I'm very happy to answer that question if I get an opportunity, David, if you want me too.

SPEERS: Please, please.

PM: I certainly have said we need a sustainable Australia, not a big Australia. I think people know
that about me now. What I mean by a sustainable Australia is protecting our Australian way of life.
That's having a job, being able to aspire to own your own home, getting decent service, health and
education, having access to wide open spaces. All of these things come into our sustainable
Australia policy, and that is what I want to see us develop, and for the future, just like now, we
deal with immigration against our economic settings. I'd want us to deal with immigration against
understanding or what a sustainable Australia is. We never had a policy in this country for a
sustainable population policy. I'm promising, I'm promising to deliver it with Tony Burke my
Minister leading the effort.

SPEERS: But why the migrations figures that have emerged today?

PM: Well those migration figures that I've just used are figures that are knowable and ought to
have been known by Tony. In fact I suspect they may have been, and, of course, I'm using for the
projections, the BIS Shrapnel projections in the public debate during the course of today.

SPEERS: Let's get back to a question from one of our journalists. Malcolm Farr.

FARR: Ms Gillard you've started canvassing the region to find a host for a processing centre for
asylum seekers, before they touch Australian territory. What is a reasonable time frame for having
one of those centres operational? Would you guarantee you'll have a processing centre operational
in your next term of Government?

PM: Malcolm, I'm going to tell Australians the truth about this, and to tell Australians the truth,
there's no quick fix. We have to work through and we have started a dialogue with East Timor, and
the President of East Timor and the Prime Minister of East Timor have said that they are open to
that dialogue. Now, what we are working towards here is something that would take out of the hands
of people smugglers the very product they sell. Why would you get on a boat, pay your money, risk
your life, if the outcome was you ended up back in the regional processing centre. It would be a
lasting solution, it would stop the boats at the shores, not as they are travelling here to this
country. That's what I'm aiming for. We started the dialogue with East Timor and are working
through. Malcolm, as you would know, there's limits to what can be achieved during a caretaker
period but I think here, if we drill right down, and I understand that Tony will deny this, but I
think it's increasingly true, if we drill right down, there's a fair bit of agreement here. We need
a regional approach that involves our neighbours, we need a regional processing centre. That should
be in a signatory to the refugee convention, a country that has taken on board the same obligations
we have taken to ourselves, and I think we are agreed we should treat asylum seekers decently, men,
women, children, should treat them with decency. If they are genuine refugees, then obviously I
think the Australian heart and compassion extends to genuine refugees, if they are not, then they
should be returned to their countries of origin.

SPEERS: Just to be clear, no guarantee on when it....

PM: I am not going to ... I understand Malcolm's question but I am not going to set a false
deadline here. We will take the time to get it done, but I'm determined to do it.

SPEERS: And Tony Abbott, your response.

ABBOTT: Yeah. Malcolm look, let's be absolutely ah, fair dinkum and upfront about this. There will
never be a centre in East Timor. Never. Just never. The Indonesians don't like it and the East
Timorese don't want it. If the Prime Minister had spoken to the Head of Government of East Timor,
rather than the Head of State before she first floated this idea, she would know that. There is
never going to be a processing centre in East Timor, this is nothing but a pre-election fudge. If
the Prime Minister is serious about offshore processing in a third country, she should pick up the
phone to the President of Nauru. We have a centre in Nauru. It was built by Australian taxpayers.
It can be made operational again in a few short weeks. If that's what she wants, there's a clear
action that she can take.

SPEERS: Our next question comes from Chris Ulhmann.

UHLMANN: Well Tony Abbott you talk about a 'pre-election fudge', do you think you should tell the
Australian people 90% of the asylum seekers that went to Nauru ended up in Australia, anyway? Don't
you think you, shouldn't you be upfront with the Australian people and say this is weigh station on
the way to Australia?

ABBOTT: But the interesting thing, Chris about the range of policies that were put in place by the
previous Government, and they involving importantly temporary protection visas, which the Prime
Minister won't support. Ah, they involved turning boats around, where it was safe to do so, which
the Prime Minister doesn't support as well as offshore processing in a country such as Nauru. The
thing about all of those policies is that they did work to stop the boats. That is the thing that
distinguishes the Coalition from the ALP on this issue. We have the record of success. They have
the record of failure. And what we propose to do is to go back to the policies that work. And I say
again, if the Prime Minister is fair dinkum about stopping the boats, if she's fair dinkum about
getting offshore third country processing, why not just pick up the phone to the President of
Nauru, who is waiting for her call.

SPEERS: Prime Minister, your response to that?

PRIME MINISTER: Well thank you and can I say sometimes Tony, I think you are a little naive about
these questions, it may be an endearing trait, but naive. People smugglers are evil people. And
what happens is when our patrol boats approach people smuggling vessels, if they say that they are
going to stop them, turn them around, they sink the boat. And our patrol staff being decent
Australians then dive in the water to rescue who is there. So the risk, the risk ends up being by
the Defence personnel. And Tony, your very own former Minister for Immigration, Philip Ruddock
basically acknowledged this, that that is the problem, it's not safe to stop the boats because the
boats are destroyed before your very eyes. That's why we need a better solution about stopping
boats before they even leave. And Just on the question of being a little bit naive, Nauru, as we
know, is in a caretaker Government with a deadlocked parliament. It is not in a position to sign up
to the refugee convention, it's not in a position to deal with these kind of questions. We are in a
dialogue with East Timor, my determination is to continue that dialogue.

ABBOTT: There's a factual error here.

SPEERS: Mr Abbott....

ABBOTT: Both sides of Nauru's politics support the reopening of the detention centre....

SPEERS: Okay....

ABBOTT: Nothing to stop it happening.

SPEERS: Well we'd better get a quick response to be even.

PRIME MINISTER: Well the Parliament of Nauru is deadlocked and obviously there isn't a functioning
Government as we would understand that concept.

SPEERS: Okay. We need to move on. Our next question from Laura Tingle.

TINGLE: Ms Gillard, the economic statement released by the Treasurer notes that the world economic
outlook is very uncertain. Last week seven European banks failed regulator stress tests, and
another seven US banks were taken over by regulators. The Government has committed to return the
Budget to surplus in three years. Are you prepared to reassess your policy settings, stimulate the
economy further to protect jobs and delay the return to surplus if the economy is dragged down by
the global economy?

PM: I'm determined Laura, to see the budget returned to surplus in 2013 as we've promised and that
would be 3 years earlier than originally predicted and it would be in front of any other advanced
major economy in the world. Now I agree with you as we look at the international outlook we've got
to be careful and there are fragilities and some troubling signs and we've got to keep them under
close watch. We of course do still have some economic stimulus - though it is coming out of our
economy - helping support jobs. I believe Laura, when we look at our future economy, including
looking at international events - the truth is that when the global financial crisis hit, we as a
Government did have the better economic plan. If we had done what Tony and other's suggested, we
would be in a deep recession and literally hundreds of thousands of Australian's would be out of
work with all the problems that come with it. Losing your home, the things we see happen on our TV
screens overseas, people losing their houses, having their mortgages foreclosed. We avoided that,
we've got people in work and I believe for the future, we've got the better economic plan and I do
not think that Tony's talked about the things he believes in, what he hasn't told you in that
recitation when it comes to the better economic plan is he wants to put company tax up. Company
tax. On businesses like Coles and Woolworths. Which would feed through to the prices that people
pay on everyday items. Bad for cost of living pressures. Bad for jobs.

SPEERS: But PM just quickly, the question is about double dip recession. If that happens are you
going to stimulate the economy again?

PM: Well whilst there are some troubling international signs, I am not, not predicting that.

SPEERS: You're not ruling it in or out.

PM: I don't think it is for me to rule in every economic circumstance around the global economy,
but for us I am very confident that we can deliver as we promised in the budget with the surplus in
2013.

SPEERS: Tony Abbott your response.

ABBOTT: Look, the Government likes to claim credit for avoiding the Global Financial Crisis, but
all serious observers would say that Australia's relative economic success owes far more to the
reforms of previous governments than it does to the spending spree of the current Government. Now
obviously when the Global Financial Crisis was at its worst in 2008, some stimulus was necessary,
but with this Government it was too much too soon. Yes, it's important to act to save jobs, but
that never justifies waste and what we have seen from this Government is almost obscene waste in
programs, like the pink bats program and in programs like the school halls program, which the Prime
Minister was herself responsible for as Deputy Prime Minister and Minister for Education. Now we
all know that there's been rip-off after rip-off in the school hall program and I suggest that it's
very difficult to trust the Prime Minister with $350 billion of Government spending, when we
couldn't trust her to deliver $16 billion of Government spending without enormous waste. Now as for
the possibilities that might arise in the future, unfortunately because of its extravagance, this
Government has put Australia in a somewhat weaker position to respond to any subsequent economic
problems.

SPEERS: Next question is from Malcolm Farr.

FARR: Mr Abbott I think it was last Sunday you were in western Sydney and you were listing the
increases in the cost of living that had been hitting families. I think at one stage you mentioned
bread prices had gone up 11%.

ABBOTT: 12% I think. 11.7%.

FARR: I'm glad you remembered that, I had forgotten that detail. Can you remember what policies you
would implement in Government specifically referring to groceries, that would keep prices down?

ABBOTT: What we wouldn't do is promise something called Grocery Watch and then not deliver, which
of course is what the current Government did. Look, the best thing we can do is get government
spending under control, get debt and deficit under control, because if we get debt and deficit
under control, there's less pressure for higher taxes and if we aren't out there borrowing $100
million a day every single day as a government, there's more money available to be borrowed by
others, by small business. So that essentially is the best thing we can do right now to help all
the people who are suffering in hard scrabble marketplace. It's to try to get debt and deficit
under control. Um. Families have to live within their means and governments should live within its
means, too.

SPEERS: But just to be specific on Malcolm's question, what would you do to reduce grocery prices,
or keep them down?

ABBOTT: Look I will not make the mistake that the former government, that the former Opposition,
now the Government did, and promise to do something which is pretty much impossible to dictate from
government. Sure, you can try to ensure that there's competition in the markets, and we try to do
that. Sure, you can try to ensure that we've got the best possible settings by government, but
government can't with the stroke of a pen reduce grocery prices, and it was very foolish verging on
the fraudulent for the Labor Party to make that promise before the last election.

SPEERS: Prime Minister your response on this cost of living question?

PM: Well, very quickly, if you put an extra tax on big companies like Coles and Woolworths as Tony
is proposing to do, guess what? Prices go up, because they'll be looking to recoup that tax from
consumers. Now that's Tony's policy setting. That's the reality of what he would do if he was Prime
Minister. For families, I believe in taking a bit of pressure off, we've delivered tax cuts three
years in a row. We created the education tax rebate and I've recently said we'd extend it to school
uniforms, help with those costs of getting kids to school. We increased the child care tax rebate
to 50% of out of pocket costs, giving that extra helping hand with the cost of child care. We did a
major increase in the pension, to help older Australians particularly, with the pressures that are
on them. These are measures to help with cost of living, and then there's the other side of the
equation, what's in your pay packet, which clearly is about your security at work. We ended
WorkChoices, delivered the Fair Work laws. I was proud to do that as the relevant minister and get
it through Parliament and, of course, we've spent much of this first week of the campaign
canvassing Tony's camouflage around the plan to bring back the worst aspects of WorkChoices.

SPEERS: Next question from Chris Uhlmann.

UHLMANN: Ms Gillard, Australia is committed to a target of 5% reduction in carbon emissions by 2020
and you're committed to putting on a carbon price. How long can we go before we reach the point of
no return? What year will we get to where Australia can't meet that cut because you've delayed for
too long. And you yourself said last year, you said, "to delay is to deny?"

PM: Chris, I'm an optimist and I believe we can work our way to a community consensus about putting
a cap on carbon pollution and designing the market-based mechanism that will support that. Now we
had a consensus in Parliament House and obviously, Tony became Opposition Leader and ended that
consensus and the rest as we all know, is history. Now I believe we've got to take the community
with us to get a deep and lasting consensus, and if elected Prime Minister, then I will lead that
debate to take the community with us. I'll work with some honest, decent Australians in our
citizens' assembly to get the job done and at the same time, we will be implementing measures that
make a difference for carbon emissions, but I'm not going to kid people. We're not going to get to
those targets unless we put a cap on carbon pollution and have a market-based mechanism and Tony I
think now rules that out entirely, and what that means is under his plan we would see him pay
polluters and carbon pollution go up by 13% by 2020. It's not the way forward. I'm going to lead,
lead to get a community consensus to find that ultimate way forward and in the meantime, we'll be
acting: Record investments in solar and renewables, the transmission lines to bring that power to
your home through the national electricity grid, changing the cars we drive, making differences to
where we work with greener buildings, no more dirty power stations, as well as rewarding those
companies that do the right thing early.

SPEERS: But PM the question is, have you been advised, there's a point at which, a date at which
it's too late and we fail to meet the target we've committed to?

PM: I think we can do what we have committed to do. I believe we can get there. We'll get there
with the cap on carbon pollution.

SPEERS: When does that have to happen?

PM: Well, we need to work through. I've said as Prime Minister I would assess this in 2012, but
what I'm not going to do David, what I'm definitely not going to do, is try and get legislation
through the Parliament, maybe even get it through, and have all of the things change in our economy
that would then change, only to find at the next election, maybe with a swing in the political
cycle, that that is all taken away. That would be dreadful for our economy, and that's why we need
this lasting consensus.

SPEERS: Tony Abbott, your response.

ABBOTT: Look I regret to say that there has been a complete failure of leadership from this
Government and from this Prime Minister. As you said Chris, she said in November that delay is
denial. She said last November that if you can't manage climate, you can't manage the future. Now
the Prime Minister says that this is all too hard for our Parliament. It's got to be sent off to a
glorified focus group. Well, we have a citizen assembly, it's called the Parliament of Australia
and if the Parliament of Australia can't make these decisions, what is democracy for? So look, um,
I think that the Prime Minister should be very clear about where she stands and how she's going to
get us there and I think that the Prime Minister believes in a carbon price. Senator Brown wants a
carbon tax. Thanks to the Green preference deal, there'll certainly be a Green balance of power in
the Senate. We will get a carbon tax if this Government is re-elected, as sure as night follows
day.

SPEERS: Laura Tingle.

TINGLE: Mr Abbott, you've declared industrial relations reform essentially off limits for the next
term of Parliament in the last week. How does this fit with the productivity agenda, particularly
when you're proposing taxes to go up on companies by three percentage points?

ABBOTT: Laura I want to make two points. The first is that the ultimate conviction of every
democratic politician has got to be to respect the electorate. I respect the electorate. I also
respect the people out there trying to run businesses. Now I've spent a lot of time, particularly
over the last couple of months travelling the country listening to people in business, and what
they are telling me is that there has been a lot of change, too much change they say over the last
few years, and what they want is a period of stability. They say they can live with imperfect laws.
What they can't live with is constant change and so I am going to give them a period of stability.

SPEERS: But Tony Abbott if you believe that reform is in the interests of boosting productivity why
don't you lead on this. Why don't you convince Australians that this is the way to go?

ABBOTT: Well because, as I said, I respect the verdict of the public, the verdict of the people at
the 2007 election, and the Prime Minister will say, she has said repeatedly, that the Government's
existing laws provide scope for improvements to productivity. Let's give those laws a chance.

SPEERS: Prime Minister, your response.

PM: Well I think we've seen this week as we went through the farce of Tony signing pieces of paper
in a radio studio, only 24 hours later for his spokespeople in his party to come out with a plan
which would require changing the Fair Work Act, that all of this is camouflage and it didn't last
24 hours. Tony believes in WorkChoices. Now I don't agree with him about that, but he does believe
in it. He believed in it when he was a senior minister in the Howard Government and they delivered
WorkChoices. He believed in it when he authored his book 'Battlelines'. He believed in it in a
large number of public statements since, and the single most important speech you can give as
Opposition Leader, the Budget Reply speech this year, there was Tony saying aspects of WorkChoices
will be back. Well, I believe respect for the Australian electorate requires Tony to come clean on
his real plans. He has always believed in WorkChoices, that's the conviction. He always will, and
so people should expect if he is Prime Minister then the worst aspects of WorkChoices will be back.
Obviously in the Labor Party, in me, it's in our DNA to believe in fair workplace relations. That's
why we got rid of WorkChoices and introduced and Fair Work system.

SPEERS: Thank you. Malcolm Farr.

FARR: Ms Gillard, your award modernisation process. You said that no employees or employers would
be worse off. There have been some workers who've had to apply for some sort of relief because of
changes in awards. There's no such facility for employers. Many of them, who are small businesses,
they are paying more. Will you change the structure of the revamped awards so that these employers
- again I say, many of them small businesses, can get some relief, as well?

PM: No Malcolm I won't be doing that. The Fair Work system that we've introduced, I believe, gets
the balance right. And we asked Fair Work Australia, the independent industrial umpire, to do the
thing that had been neglected for years and years and that was to take more than 4,000 old big
awards and modernise them and we've done that to around 120 simple modern awards. Better for
employers because they can find the award that applies to them. Better for employees because they
can find how they should be paid. And that, that simplification, is literally worth billions of
dollars of benefit to the economy with the benefits of well, of creating a uniform system of
workplace relations for the private sector so you don't have to worry anymore if you're in a state
system or in a federal system. Now in the transition, employees got the benefit of take-home pay
orders to make sure that they couldn't lose take-home pay and employers got the benefit of a five
year transitional period. I believe that's the appropriate balance. I'm committed to keeping the
Fair Work system. I'm the architect of the legislation that went through the Parliament. I believe
in it. My Government believes in it. The Labor Party believes in it, and the contrast here is
between that and Tony's passionate and long-standing belief in WorkChoices.

SPEERS: Mr Abbott, your response?

ABBOTT: Well look I don't say that the system is perfect, but I think that it's the best that we
are likely to get at this time and for the foreseeable future. As I said, I respect the verdict of
the people at the 2007 election and I respect what I've been told by businesses around the country.
We have to work within the existing legislation to address the sorts of issues which you've spoken
about.

SPEERS: Our next question is from Chris Uhlmann.

UHLMANN: Julia Gillard, you've said that you won't speak about the conversation that you had with
Kevin Rudd. Fair enough. You've said you won't speak about what happens in Cabinet. Again, fair
enough. But can you give us a simple number. How many times did you warn Kevin Rudd that his
government, your government was on the wrong track before you took his job? Was it once? Was it
twice? Was it three strikes and you're out? How many times did you tell him, did you warn him,
before you took his job?

PM: Well Chris I'm not going to canvass conversations I had with Kevin Rudd, but I am very happy to
say this. I understand that when I became Prime Minister on 24 June that there were a lot of
Australians who were pretty surprised, pretty taken aback. That they actually were asking
themselves the question, you know, 'what's happened, what's gone on here, why has it happened?' And
I want to answer for Australians the 'why it's happened', and the truth is obviously I worked
alongside Kevin Rudd and wanted to deliver good government to this country. Increasingly, I became
concerned that the Government had become stuck and bogged down in a series of issues. The
acrimonious debate about the mining tax which I thought was putting pressure on mining communities,
which wasn't good for our economy. I was also concerned about things like being a sustainable
Australia. And from the position of Deputy Prime Minister, I did everything I could and I worked as
hard as I could to try and correct some of the problems that I could see. But it came down to a
really difficult choice and it didn't sit easily with me.

PM: It's a hard decision, a really hard decision but it came down to a choice as to whether I
should continue to be of service to Kevin Rudd or whether I needed to look to my service to the
Australian people.

It's a hard choice, the choice I made was to be of service to the Australian people. Now,
overwhelmingly, my Labor colleagues came to the same decision and I understand that Australians are
still thinking this through and I understand Tony will make some political points about it. But
Tony knows what it's like to think that your political party needs new leadership - that's why he's
standing here instead of Malcolm Turnbull.

Now, appropriately, the next decision is for the Australian people. When I became Prime Minister I
said I would quickly move to an election to give Australians the choice and that's what the
election on the 21st of August is all about.

SPEERS: Just quickly, Prime Minister, Chris' question is not about what was said in confidentiality
but just how many warnings? Were there three, were there none?

PM: Well I am not going to canvas conversations that I had when Kevin Rudd was Prime Minister and I
was Deputy Prime Minister - simply not going to do that.

SPEERS: Tony Abbott, your response?

ABBOTT: Sure, look, um, this has been a bad government and the problem has been the government, not
the Prime Minister. The problem has been the policies, not the face at the top. Now, unfortunately
they've changed the face at the top but nothing has really improved, in fact, the shambles has just
got worse over the last month or so. The Prime Minister, the new Prime Minister set herself three
tasks, three, uh, messes created by the Government, that she was gunna fix. The mining tax fix -
well that hasn't really worked, um, the boat people fix, well that obviously hasn't worked and the
climate fix, well we all know what that is - another fudge. Now, um, this is the problem. It's been
a very bad government that is trying, as it were, to trick the public that it's somehow different
because it's changed the person at the top but we've seen this at the State level and I think
people are very disappointed with governments and political parties which, in the end, play these
sorts of factional games, these sorts of games over the leadership.

SPEERS: All right, our next question is from Laura.

TINGLE: I had a question for both of you, or questions for both of you, on Afghanistan. A
conference of a lot of Australia's allies in Kabul last week was talking about a 2014 exit
strategy. Ms Gillard, do you intend sticking with the former Prime Minister's stated ambition to
withdraw troops in two to four years time and, Mr Abbot, in light of the Kabul conference, is
sending more troops still an appropriate strategy to pursue if you were in Government?

SPEERS: I might just say we're nearly out of time for the question and answer session so if we can
keep these tight. Tony Abbott.

ABBOTT: Yeah, well, Laura look, uh, I think our troops in Afghanistan are doing a very difficult
job magnificently and I think it's important that they stay there until that job is done and the
job is to ensure that Afghanistan never again becomes a safe haven for terrorists. Now, as for what
might happen in the future, let's see how things develop and I would respond as Prime Minister,
appropriately I hope, to any development but I would always do it with the advice of the military
chiefs.

SPEERS: Prime Minister.

PM: My position is the same as Kevin Rudd's and the position is we've got a mission. The mission
there is to train the Afghan National Army so that they are in a position to guarantee stability
and security in the nation. Our best estimates now, I'm advised, are that that will take between
two and four years but Laura the thing that defines how long we're going to be there is getting the
job done, not a deadline in time. So our advice currently is the mission will take two to four
years more.

SPEERS: All right, there are many issues that we could still cover tonight but unfortunately we
have run out of time. It is time for closing statements and Prime Minister, once again, you're
leading off.

PM: Thank you very much David and thank you Tony. I think that that's been a good discussion and
Tony and I have had the opportunity of having a lot of debates and discussions over our years in
politics. I think this has been a good one but there are real differences between us and as we move
to the 21st of August, Australians will be assessing those differences. As Prime Minister I would
never, I would never, cut back the investments in our schools that are enabling us to have better
quality teaching. I would never cut back the investments that are giving computers to kids. I would
never cut back our Trades Training Centres because they're so important to giving kids skills for
real, real work, the real world. And I would never cut back the investments we're making in GP
SuperClinics, in the After Hours Hotline to help you find a doctor. I wouldn't cut back our
investments in e-Health records, the shape of the future and I wouldn't stop building the National
Broadband Network - so important to the jobs of the future. These are real differences. I would go
forward investing in the services that Australian families need - great schools, health care and
the shape of the future - the National Broadband Network. And as Prime Minister, I simply can't
imagine putting up the company tax rate and having that flow to prices that families pay. I'm going
to decrease, I'm going to cut the company tax rate and I wouldn't ever, I would never go back to
WorkChoices - it would be wrong to do so. I would go forward with our Fair Work system.

Now, the election on the 21st of August will be about the future of this country and I believe we
are a confident, optimistic people and there's no challenge in our future, no challenge that's too
hard, that we won't master it if we do it together and I am an optimistic person. I am a believer
that a glass is half full and I will bring that optimism to think my way through the new solutions,
to learn the lessons, to deliver the policies that Australia needs. Policies to make sure we've got
a strong economy and prosperity, including getting the Budget back to surplus in 2013, policies to
make sure we've got a sustainable Australia. That we're taking with us into the future a very
special, very precious Australian way of life and policies to make sure that families have the
services they need. That's what I'm standing for. I'm going to be submitting myself to the
judgement of the Australian people on the 21st of August and I believe in their decency. The
decision is for the Australian people. Thanks David.

SPEERS: Thank you Prime Minister. Mr Abbott, your closing statement?

ABBOTT: Thanks David, my pledge to the Australian people is to end the waste, to pay back the debt,
to stop the new taxes and to stop the boats. That's my action contract with the Australian people.
Under the Coalition there'll be no big new taxes, decisions will be made by Cabinet, not
powerbrokers and Government will live within its means, like you do, like businesses do. Now
tonight was the Prime Minister's chance to tell us why the Government deserve to be re-elected but
she couldn't. The big risk in this election is that a really bad government might get the second
chance that it doesn't deserve and that Australia can't afford. This is the first government in
living memory which is not running on its record. It can't run on its record because that's record
spending, record deficits, record boats and getting rid of an elected Prime Minister in record
time. Re-elect this Government and there'll be six years of pink batt disasters and school hall
rip-offs. There'll be more spending, more backflips, more debt, more taxes. It will just get worse.
There will be more hits on your standard of living. We'll get a mining tax if Labor is elected.
We'll get a carbon tax if Labor is elected - thanks to the preference deal with the Greens that not
even Bob Brown likes.

So this election will determine whether the Prime Minister is to be elected by the people or by the
powerbrokers, whether Prime Ministers are to be chosen on the basis of the job they've done or
gender and whether the national government should be run as a mates machine like the Labor
Governments in New South Wales and Queensland. It's about whether the public can trust the Labor
Party when not even Kevin Rudd could.

So there is a better way. A fair dinkum paid parental leave scheme, that standing green army 15,000
strong, community runs schools and hospitals with more beds and, above all else, a better economy
with no reckless spending and less debt.

So when you come to vote, I hope that you will look at the record, not the slogans. Look at the
incompetence, not the promises and look at the broken government not the new face at the top.

I ask for your support to end the waste, repay the debt, stop the new taxes and stop the boats.
This Coalition is all that stands between the Australian people and three years of more
incompetence and more taxes so let's have a change of government before any more damage can be
done.

Finally let me say that this has been a good debate and I say to the Prime Minister, let's have two
more of them.

SPEERS: On that note I would like to thank you both for taking part in tonight's debate and wish
you well for the remainder of this campaign. Can I also thank our panel of journalists - Chris
Uhlmann, Laura Tingle and Malcolm Farr and thank you for joining us. I hope this has helped you
with your decision on who to vote for come August 21.

I will now invite the two Leaders to shake hands and wish you all a good night.

ENDS