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(generated from captions) carbon tax. Tonight she has a job

ahead of her trying to sell it to

voters from both sides of the

spectrum. After the break on PM

Agenda we will preview that and see

how the carbon tax is viewed here

government. in the West, as well as the Gillard

Welcome to the program. We are

coming to you live from Perth town

Hall, where later tonight Julia

Gillard will be fronting a crowd of

150 voters to try to sell the

carbon tax. If the Sky News 'The

Western Australian' People's Forum.

It's a state where the federal

Government is struggling. It's the

toughest date for the carbon tax as

well. The resource boom state

doesn't want to see a carbon tax or

mining tax. The Prime Minister will

have a job on her hands tonight

when she fronts this crowd. Coming

up we will have a look at what

response she is likely to receive,

how the carbon tax is viewed in the

West. This marks a return to be West. This marks a return to be

wearing out the souls, the rubber

of her shoes on the carbon tax

front for Julia Gillard. In the

last week or so she has been

focused on rolling out other

Disability Insurance Scheme, policies. Aged care, National

planting the health agreements with

the states as well. It has been a

busy period for the Prime Minister,

while Tony Abbott has been on leave, but he is back now,

but he is back now, and so is the

carbon tax battle. Despite all the

policy effort from the Prime

Minister in the last few weeks, a

lot of it has been overshadowed by everyone focused on world markets.

We have been watching are

superannuation start to slide,

worrying about markets, Wall Street,

Europe. In Australia it has been

bouncing around a lot as well. We

will bring you the latest in the

close of the market shortly. It has

done little to help consumer

confidence in Australia, which has

been rocked by inflation picking up,

worries about employment.

Unemployment is now 5.1%. It was

revised up fortune as well, and

5.1% in July. The figures aren't as

bad as they seem. Only a net job

loss of 100 or less. These figures

to move found. As I said, I think

it's important to look at the

actual figures in terms of numbers

of people in employment. There is a

marginal change. We also saw more

people entering the Labor force, so

there are more people looking for

work and there were previously, so

that has an effect on the

percentage unemployment rate. There

are positives it -- to sell for the

Government. The jobless rate is

half what it is in the US. The fact

that the unemployment rate has gone

up gave Tony Abbott another opening

today. It is the very worst time to

be adding to the burdens of

Australian business, and that's why

the best thing the Government could

do to restore confidence here in

Australia would be to drop the

carbon tax. This is a toxic tax.

Even people who previously were in

support of putting a price on

carbon say that this is the wrong

way at the wrong time. It didn't

take the Opposition Leader long at

all to return to his favourite

theme of the carbon tax. Back on

deck as of today. He was hearing

person as well, visiting a solar

hot water plant that makes tanks.

To make his point the Coalition

would give them something, more in

a rebate and the Government office.

He has also picked up on the

changing language from the

Government when it comes to the

economy and the bottomline about

its commitment to return to surplus

next financial year. In the last

couple of days the Prime Minister

has started to say this is

something the Government is working

towards. Wayne Swan said today it

was an objective. I think it's very

important that the Government on its commitments. -- honour its

commitment. For months now it has

been stating that a surplus in

2012-13 is a fact. But the rock-

solid commitment to a surplus in

2012-13 has now become a new

objective. -- a mere objective. I'm

confident that by the weekend it

will just have become a dream. No

rest for the Government on asylum

seekers as well. After signing its

Malaysian agreement a couple of

weeks ago, it has had little

success. Earlier this week the High

Court effectively put the thing on

ice, extending and injunction,

meaning no boatloads of asylum

seekers can be flown to Malaysia

until the High Court makes a

decision on whether it is legal.

More bad news this afternoon -

another boat has arrived, carrying

100 asylum seekers, it is expected.

It is due at Christmas Island about

now. For some initial reaction, I'm

joined by the shadow immigration

minister Scott Morrison. About 100

on the boat at the moment, waiting

in Christmas Island to be

transferred to Malaysia if the deal

is given the green light. It means

they are one quarter of the way

through the arrangement and it

hasn't even been to the High Court.

We have had since May 7 nearly 800

people turn up. I think this

highlights the use by date of this

agreement and the difficulty the

Government has itself in. It is in

limbo, not sending a message of

deterrence. It could fill up the

800 or a significant amount of it

before the High Court makes a

ruling. We will see. We have had

about one vote per week since the agreement was announced. I note

they haven't confirmed the boat yet.

Everyone is on Christmas Island

looking at the thing as it comes in, but the Government has confirmed

that it exists. The chaos that we

have had for three months over this

continues with the High Court saga.

It will be a couple of weeks before

they make a decision. Under this Government the chaos continues.

High Court Given the uncertainty about the

High Court decision, what should

happen to these people? Should they

be processed on Christmas Island

and transferred to the mainland?

This is the dilemma the Government

has. I assume if they are

successful they will transfer them

to Malaysia. But that's what they

said for all of those before the agreement, that they would be transferred to another country. transferred to another country. The

Government says they have something

in PNG, but with this Government to

have to wait to see it to believe

it. I will be holding my breath on

that. Certainly also on Malaysia,

because it still hasn't minded. Are

you saying Malaysia is failed

before it gets off the ground?

Almost 800 people have turned up

since they announced it and it is

just what 800 people. How much

longer it takes to get to 800, who

knows? They have no plan past 800

and they still don't have ever

thought on whether they will send

children. The policy remains caught

up in a web of ineptitude and

incompetence. The new prime

minister in company Guinea is making positive signals about

reopening Manus Island Detention

Centre. Julia Gillard has said

talks are progressing. Would you

welcome that sense of being

reopened? We have a centre there.

It wasn't the primary centre, that

was Nauru, and we still think that

is the primary option. I don't

believe Manus Island would be an

open centre. Why the Government

believes Manus Island is a better

idea than Nauru is beyond me.

Practically, Nauru is a better

option, but it seems the Government

won't go there out of sheer bloody

mindedness. The Government's I

meant was always that Nauru was not

a signatory to the convention. It

has exposed that it was just an

excuse from the Government who

didn't want to do what John Howard

did, and that is petty. When we

were operating both centres, Nauru

was the primary operation. Then they are still offering permanent

protection visas, and we never said

the Pacific Solution on its own was

the measure. Temporary protection

visas are a key part of the border

protection regime we had, and they

abolished them. How quickly could

you get them back in place? There

is already one of the books. It

basically forms the same purpose,

so we could use it immediately. Are

you confident, if you did that, if

you reopens Nauru, used the TV is

more, you would see a reduction in

boats? Over a couple of months we

went from 43 votes in one year to

zero in the following year. I won't

make the type of predictions the

Government likes to. You have to

mean what you say, follow through

on what you say you will do. I

don't think anyone will have any

doubt about our resolve. But with

this Government they have nothing

but doubt. That's why the

announcement with PNG was met with

a shrug of the shoulders - "OK,

Prime Minister, we will believe

that when she see it." You are here

in Perth along with other

politicians in the next few days.

What will be the focus of the talks?

talks? There is a focus on world

markets and everyone is concerned

about the debt crisis in the US.

The economic issues are an

important part of the discussions.

On Saturday we focus on security

issues. What is happening in the US

at the moment means something for

us all. The virtues of the dialogue

is to get a better understanding of

what is happening there for us. How

we might respond to that. It also

demonstrate the closeness of the

relationship. Those things happen

by accident. As good as friends we

are with the US, you don't take it

for granted. They have come all

this way to do it with us. You

agree that... Unemployment did move

up to date, but it is still half of

that in the US. There is only one

reason for that. Not because of how

much money this Government borrowed

- they borrowed a lot -- but it's

how much the previous Government

paid back. We set ourselves up

quite well when we left Government

in 2007. This Government has

benefited from it. It has largely

blown it, but the residual strength

of the previous Government... Tony

Abbott often says, 20 years of

economic restraint. Thanks for that.

We will be back after the break.

Welcome back. We will have more

from Perth in a moment. Time for

the headlines. The unemployment

rate unexpectedly jumped to 5.1% in

July, sparking fears over the

outlook for Australia's economy. In

total, 100 jobs were lost last

month, according to the latest

Australian Bureau of Statistics

figures. Economists had expected

the economy to add 10,000 jobs and

that jobless rate to remain at 4.9%.

The Aussie dollar plunged after the news, and the Australian stock

market has defied big falls in

Europe and the US to hang onto

yesterday's games. Police in

England has finally gained the

upper hand, stopping most of the

violence that has lingered for days.

Courts are beginning to deal with

those charged over the writing.

Some are even staying open all

night to deal with the hundreds of

people charged. The British Prime

Minister has paid his condolences

to the families of the three men

who were run down and killed as

they tried to protect their

community in Birmingham. One of

Australia's by senior police

investigated has been found guilty

of conspiring to import ingredients

for illegal drugs. A former

investigator with the NSW Crime

Commission, Mark Standen, showed

little emotion when his verdict was

handed down. He was accused of

conspiring with an informant and a

food wholesaler to import 300 kg of

pseudoephedrine, the key ingredient

in ice and speed. The Crown argued

his own dire financial situation

was his motive. A sentence hearing

is due in December. In New Zealand, Christchurch councillors have

adopted a landmark draft plan for

rebuilding the city. The plan calls

for a smaller CBD filled with low-

rise buildings. It was put together

after more than 100,000 rebuilding

ideas were submitted by the public.

An $8 million memorial will be

built. Cadel Evans has arrived home

in Melbourne. He arrived this

morning, where he was greeted by

the Victorian Premier and the

sports minister. Thousands of fans

are expected to line the streets of

Melbourne tomorrow, as Cadel Evans

writes to the city. He spoke

briefly about his historic win

after landing this morning.

Thank you. We are live at the Perth

town Hall. Tonight will be the

people's Forum. Julia Gillard will

be taking questions from about 150

local voters here on the carbon tax.

This is a difficult state for the

Labor government, and certainly the

carbon tax is not exactly popular

here. The Prime Minister will have

the task ahead of her two win over

the crowd this evening. Just what

does WA think about the carbon tax?

We know the local Liberal government is not supportive, nor

is it supportive of a number of

other government measures. The

mining tax, for example, is bad news, according to Colin Barnett.

Yesterday's announcement of a

national disability insurance

scheme was not exactly welcomed by

the Western Australian government.

David Lipson caught up with the

Western Australian Treasurer. Thank

you for your time. Will WA consider

signing up to the national

disability insurance scheme? There

will be many twists and turns between that scheme coming to realisation, and will give it consideration. The Productivity

Commission came out with a scheme

and I think personally there is

merit in insurance schemes in this

area of disability and similar

areas, but the not so fine print is

to be part of that scheme WA may

have to give up $600 million worth

of its own taxes. This sits in the

context of the fact that we are

looking to, on forecast, give up

75% of our GST revenue, $12.3

billion. We don't have much revenue

left to give up. The $600 million

would essentially be reimbursed by

the federal government, which would

pick up the tab for disability

insurance. I am not quite sure how

that will happen, having read the

limited detail out so far. What the

federal government says is that to

ensure neutrality, the state

government would have two give up

taxing powers which represents $600

million worth of tax revenue. If

you look back to the situation with

the GST, in signing onto the GST,

we undertook to give up a range of

state taxes, which we did. We

expected to get a fair share of the

GST back. What we ended up getting

was not our per capita share, but

we are getting something like 70-

75% of that. Not a very good deal.

It does mean we are in a situation

where we do not have a lot of

revenue in terms of state taxes

left to give up, because we are not

getting a fair share of the GST. If

WA ops out, does it put WA a risk

of having a second rate insurance

scheme? We have the best disability

services regime in the nation. Keep

in mind our government put across

$600 million into the not-for-

profit sector here, which is in the

area we are talking about. We have

the best system. We are one day

into the debate about a potential

new system, and the big catch to

that isn't there would be a

requirement that we in effect pay

for the system by giving up a large

amount of tax revenue. That is a

debate worth having, but there is

no way no one with any sensible

would on day one day we're definitely signing away $600

million worth of revenue. That is

ridiculous. It will be a long

process of negotiation. We are open

to that negotiation. As it was in

the health system, where WA fought

the hardest to give up its share of

the GST. In the end it was agreed

upon that WA and the other states

will not give up GST. Were there

any other specific sweeteners from

the federal government will WA to

get this on board? With respect to

health, when you say sweeteners, we

looked at their help deal, which

goes out to the use of 2017 -2019,

to work out whether or not we would

be better off in terms of the net

funding that our public cost --

public hospital sector receives. On

balance, based on what we have seen,

their projections are difficult, we

determined it was in the best

interests of western Australia to

sign up. That is only with respect

to certain conditions being met. I

think our position was at least

open and transparent from the very

beginning, and in the end the

Commonwealth agreed to the

conditions. In terms of this being

a great negotiating win for the

Commonwealth, I am not sure. On

balance I think the system that

will result is better than the

system that is being replaced. That

is only because WA made sure we did

not give up more of our GST, which

has already been whittled down to

about 33%. On your first point

about the economy, it was a month

ago Premier Colin Barnett said the economic strength and trajectory

was almost unbelievable, yet this

wiki is saying the economy is

extremely fragile. Words similar to

what you are talking about. Which

one is it? People talk about the

two-speed economy, and to a large

extent WA experiences its version

of that. I prefer to call it a

patchwork economy. There are

aspects of the economy which are

doing well, mining and resources,

but there are other parts, not

dissimilar to other parts of

Australia, that are finding very

tough, the manufacturing industries

that are being affected by the

strength of the Australian dollar

and a range of other industries.

There is no doubt the mining and

resources sector is growing and

growing strongly, but that growth,

with respect to an industry where

capital is very mobile, and we have

to make sure that we are bringing about economic circumstances that

attract capital investment that

allow for large-scale construction

projects to be undertaken with

sufficient Labor. What I would say

is there is a view that exists in federal government that what

happens because it is based on a

comparative advantage of resources

is going to happen no matter what

you do and no matter how many

carbon tax as you bring in all men

all resources when taxes you bring

in, no matter if you withdraw from your previous federal government's

promise of assisting state governments to compensate for

native title which allows these

projects to go ahead. You can do

what you like and this will just

keep moving. That is profoundly

false. I think that is what the

Premier is getting at when he talks

about fragility in the economy.

What you think of direct action,

Tony Abbott's plan? It will not

have any measurable effect on the

climate, and neither will the

carbon tax, on the global climate.

Neither will direct action. Is it

necessary? Can I say we have enough

problems in state politics dealing

with state issues, and we try not

to involve ourselves too much in

areas that are not in our immediate

policy purveyors. The carbon tax as

the Prime Minister has proposed it

will have the most minuscule effect

on a tiny part of global emissions,

and the price that you pay for that

minuscule, negligible effect is

going to be very high across the

Australian economy, and

particularly high in WA, which is

benefiting the Australian economy

more than anything else. Economist

a direct action will be more

expensive. I am not a person who

has gone across all of the economic

debate about direct action versus

the carbon tax. What we focused on

and what we focused our modelling

on is what we are dealing with

right now, and that is the prospect

of two very major taxes in the

middle attacks and the carbon tax,

having a kick in the guts effect on

our economy. Kristian Porter, the WA treasurer, talking to David

Lipson. We will see how all of that

plays out amongst the people, 150

voters, there will be here tonight

putting their questions to the

Prime Minister, Julia Gillard. All

of this comes as most Australians

and most people around the world

keep a worrying eye on the markets.

They have been falling and bouncing

all over the place. It was a horror

night as far as the European

markets were concerned, and more

bad news from Wall Street. How did

the Australian market go today?

There was a bit of a recovery, but

the close was in the red. Yes,

local shares ended the session flat

after posting and other sharp

reversal. Those rises came as

investors snapped up the big banks,

goldminers as well, after a fresh

record in the precious metal of

US$1800 an ounce. By the close the

benchmark S&P a set 200 index lost

around half a point. It ended in

the red, although we were pretty

thrilled at the close, because it

was down significantly at one point

of trade today, about 2%. The

benchmark closed at 4141. The move

preamp and expected recovery on US

markets tonight, with Dow futures

currently pointing to a stronger

start on Wall Street. They are at

around 150 points. Boosting the

market today was the shock rise in the rate of unemployment. Today's data showed unemployment at 5.1%.

Most economists were expecting the unemployment rate to remain

unchanged, at 4.9%. 100 jobs were

lost last month. Economists were

expecting the economy to add 10,000

jobs. A very big discrepancy

between those numbers and what economists were actually expecting. More than 20,000 full-time workers

lost their jobs in July, but the

number of people in part-time work

to increase by around the same

amount. Total workforce

participation remained steady. It

is more a shift within the job market as opposed to people actually losing overall jobs. The

good news is that report could see

the reserve bank hold off on

raising interest rates any time

soon. Following the release of that

data, we saw the Aussie dollar

dived almost 1% against the

greenback. That boosted the big

banks, which in turn lifted the

overall market back into the black.

That is where most of the selling

and buying was today. On the upside,

the renewed worries have prompted a

rush into gold, supporting it to a

new record high, US$1800 an ounce.

Despite the currency turmoil, the

economy does look well placed to

weather the storm. The

International Monetary Fund came

out today and said the state of our

economy is in fact looking pretty

good on the back of strong outlooks

for commodities. The IMF warned

policymakers do need to be wary of

capacity and price pressures. After

a temporary setback in the first

quarter because of natural

disasters, the fund says activity

is expected to bounce back in the

second quarter. PC GDP rising by 2%

this year, 3.5% next year, with the

jobless rate remaining below 5%, so

obviously that rate rose above 5%

today. We are waiting to see

whether the IMF will come out and

change its statement on our economy,

or alter its growth forecast for

GDP. Core inflation will likely

rise above the RBA's 2-3% target

band in 2012. Reporting season

continues in earnest. News Corp

today delivered an 8% rise in full-

year profit. US$2.74 billion, so a

good result. Rupert Murdoch hosed

down speculation about his

leadership, saying he has a full

backing from the board to stay in

charge as chairman and chief

executive. The results come amid the ongoing investigation and controversy surrounding the

international phone hacking scandal,

which in part led to the failure of

the BSkyB takeover in the UK. All

in all, continued volatility

driving the markets. Even though

the Dow futures are pointing to a

positive start on Wall Street and I,

we will have to wait and see. Thank

you very much. Very difficult to

speculate on what will happen on

Wall Street. It is going to be

fascinating to see what the reserve

bank does X months, because despite

all of this volatility and the

falls in the dollar and the

unemployment rate picking up,

inflation is also a bit of a

problem out there. Everyone is

saying they will cut rates by half

a percent, but I do not know. After

the break, we will look at what

will happen tonight at the forum.

Welcome back. We live in Perth

tonight. The People's Forum will

take place in a few hours from now.

The Prime Minister, Julia Gillard,

will be taking questions from 150

voters as she tries to sell her carbon tax.

carbon tax. I joined by David

Lipson, who has travelled across

the continent with me. And someone

who lives here all the time in the

city, Adam Harvey. Let's start with

you. A lot of politicians are in

town for various reasons. You were

following Tony Abbott today. He is

back from his break today, back on

deck. Itsel -- it looks like he was

all guns blazing. Is added epic two

are of the solar hot water plant

today. The panels are: The brief as

well. He was talking about the

carbon tax. He led a very long to

work off the factory. -- long tour.

He got questions like, what will be

carbon tax mean for us? He was

asked to summarise it, what the

Government's proposals are. He did

alright. He said he would try to be

fair... He gave a reasonable

summary, at the end said, look,

that's what they say, but I think

it will be bad. Even for a place

like this. At first glance it seems

a strange place to do it. The solar

industry would be happy with the

carbon tax. Yes, you would imagine

it is an industry that moves people

off the grid. He said, people will

move away from it, but it will also

mean, for a factory like this, it

will be more expensive to build the

solar panels and to build the tanks

themselves, because steel is more

expensive, electricity is more

expensive. In the end it may

threaten one of the last remaining

successful industries. He is really

taking the fight into the support

base for the carbon tax. Tell me

more generally. You are based in

Perth. The mood in Western

Australia when it comes to the

carbon tax, is it popular,

unpopular? It probably falls

somewhere in the same realm that

the mining tax does, and that is

very unpopular. The mining tax was

a huge disadvantage for state and

federal Labor here are and has been

for over a year. The carbon tax is

similar. There is a two-speed

economy in Western Australia. The

people are conscious of it and they

are worried the carbon tax will

have a big impact on the industry's

that aren't connected with mining

in places like where Tony Abbott

visited. It means the job for the

Prime Minister will be difficult.

She has done pretty well on these

forums. She did one in Brisbane -

Queensland, a resource boom state -

but he did a pretty good job. We

will be taking a survey before and

after the actual forum to try to

work out how the people she has

convinced. In Brisbane, you are

right, she managed to convince if -

- a few voters. If they are not

winning over the crowd, they are in

the wrong room. It's something

Julia Gillard has had for a while.

She expects that eventually, when

people understand the carbon tax,

when they understand it is not

really going to affect them too

much, as she says - the prices will

only go up 0.7% on average - they

will come on board. But you are

right, it's a tough job here at

than in any other state. Julia

Gillard is dammed if she does,

dammed if she doesn't. She is

criticised for spending too much

time selling it, but then she has

wanted back and started selling

other things so people ask why she

has stopped selling the carbon tax.

People have probably been relieved

not to hear about the carbon tax in

the last few weeks, but it is back

on the agenda. It's not just

because Tony Abbott is back. Adam,

finally, is it just the carbon tax?

Or is the Gillard Government on the

nose in the West? I certainly think

the seizing of the cattle trade did

enormous damage to Western

Australia. A lot of those crazy as

are based in the north, in the

Kimberley,. -- graziers. People in

WA considered themselves on the

frontline in terms of asylum

seekers as well. That is flaring up

this week as well. It will be

fascinated to see what we get

tonight. Thank you, both, for that.

It kicks off at 6 PM Western

standard Time, 8 PM Eastern

standard Time. In a few hours from

now. It will be a one-hour forum.

We will have the post match and

pre-match with David Lipson and a

panel of experts looking at how the

PM will perform, and then how she

does. Stay with us on Sky News.

After the break, the latest news

with Mike Willesee.