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Sky News On The Hour 4pm -

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Good afternoon, welcome

toll program. I'm David Speers. Electricity prices

are on the rise and it's not

just the carbon tax now being

blamed. We're being told

getting rid of it will also put upward pressure on

electricity prices. Confused? Hopefully this afternoon we're going to get some

answers. We'll be talking to

a representative of the

electricity industry, also

joined by Joe Hockey on a bit

more on the Coalition's plans

to repeal the carbon tax.

Finance department official

putting a bit of a question

mark over a key part of the

carbon tax plans, the $10

billion clean energy finance

corporation. Is that going to

be dealt with on the budget

or off the budget. It may

sound technical but it means

a hell of a lot as to whether

the Government is going to

get the budget back into

surplus next financial year.

Also later this hour Canberra

being spruced up for the

Queen's arrival tomorrow. How

important is this visit down

under? Possibly the last for

Her Royal Highness. Telstra shareholders have voted to

hand over the company's fixed line network to the National

Broadband Network. The $11

billion deal will see the telco progressively shut down

its copper-based network and

transfer its cmple customers

is cross. Another crucial

step towards the National

Broadband Network. The NBN

is a transformational events

in the history of this

industry and therefore it

does provide us, Telstra,

with new strategic

opportunities as we go

shareholders overwhelmingly forward. Telstra

endorsed the $11 billion

deal. More than 99% of proxy

votes backed the deal. Telstra management says the

company's strategy will not

change but argues the deal provides value for shareholders. It does

provide us with a unique

opportunity to accelerate the

investments in this next

generation of technology. Whether the proposed National

Broadband Network transaction

would result in a windfall

gain for management re

muneration. The very clear

answer is no. While

shareholders have now

approved the deal, it's yet

to see the green light from

the watchdog. It includes 28

new locations including

Wollongong south of Sydney,

the largest regional centre

to join the network so far.

Prime Minister Gillard

announced the next roll-out

of the NBN and says 500 jobs

will be created during the

construction phase in the

Wollongong area alone but she

argues the network brings

with it longer term benefits

too. Also the benefit that

will come from the productivity advantage for

current businesses, access to

new markets for current

businesses, because they'll

with the rest of Australia literally be able to deal

and the rest of the world as

if it was at their door. The

electricity industry is

warning it's inevitable that

power rises will rise -

prices rather will rise if uncertainty continues over

the carbon tax. Opposition

leader Tony Abbott has made a

pledge to repeal the tax and

has warned businesses not to

buy future carbon permits

because they won't be

reimbursed. The Prime

Minister says the Coalition's

position will only lead to

higher prices. So let's go

through the list of what the

Coalition is talking about

today, destroying jobs,

electricity prices up and

more bureaucracy. That is

what the Coalition is aiming

for. Prices are already

forecast to rise under the

carbon tax but most Australians will be

compensated for the increase.

The Coalition argues the best

way to lower prices is to

dump the tax. The tax being

placed on industries ins

Australia, around $100

billion or more by 2020. This

is what's going to cost the

electricity industry, that will obviously pass the costs

on to the consumer. Lends

ease delays are expected for Sydney commuters this afternoon after more than a

third of the city's

government buses were taken

off the road. The rail tram

and bus union has forced the

action after video emerged of

a large fire on a gas powered

bus in July. Drivers are now

refusing to operate more than

700 gas powered buses at five

depots across the city. The

industry has apologised for

any disruptions but says the safety of drivers and

passengers for that matter

must come first. We're going

to take you live now to the

West Bank where Israel and

the Palestinians are

continuing the processes for

an historic prisoner swap.

The first phase was enacted

here at the prison roughly

around three hours ago. It

will see 477 prisoners

released in exchange for

captive Israeli soldier Gilad

Sheleet. In what will be the

highest price ever paid by

the Jewish state for one

person. If it all goes to

plan it will be the first

time in 26 years that a

captured soldier has been

returned to the Jewish

statement alive. The deal

reached between Israel and

the Gaza strips Hamas sees

him freed after five years of

captivity. For continuing

coverage of the Israel

Palestinian prisoner swap

simply press red on your

remote. The company which

chartered the stricken cargo

ship Rena has pledged a million New Zealand dollars

towards the clean-up. Poor

weather has again stalled the

pumping of oil from the

detaineer ship. Authorities

are warning the next 24 hours

are critical. Rough seas are

forecast with real fears now

that the ship will break

apart. After two weeks of

violence finally the Rena's

charterer fronted up. So

today I can announce that we

want to put at the disposal

of the relevant authorities

$1 million as a voluntary donation. Mediterranean

shipping chartered the reapa

to carry its cargo, it does

not own the boat. But are

adamant this is not a guilt payment. There is no guilt

at all, we do feel for the

people of the Bay of Plenty.

The oil was New Zealand's

largest oil spill. There's significant pressure on the

people of the Bay of Plenty

and we are trying to show a

gesture. The company says

this is the extents of its generosity. Though the Prime

Minister is expecting more.

Look, it's a start, but

that's not the end of it from

our perspective. It's not

for me to tell the Prime

Minister what to think but

amnesty has absolutely no

liability in this wreck. Out

at the Rena progress has

halted. The salvage has

managed to moved tonnes of

oil off the stricken ship.

At the moment it's an issue

of swell size. At the moment

the swell's between 2 and 4 m

and that is creating the

problem both for the

alongside. The pump has been

resealed. The advice I have

is that the Sale vers have

all the equipment that they

need either on board or ready

to go, so as soon as they can

get back a Board they'll look

to restart pumping. But more

oil has released into the

ocean. We have a small

release of oil at the

overflight. That oil is

relatively light. There is

some small concentrated

patches of dark oil. This is

what we call sheen, moving

offshore as we speak and

breaking up within 2 km of

the bow of the ship. More is

expected to be released with

growing fears the ship will

break apart. The Government

is making no firm Sxhitments

on a compensation package for

local businesses. Ifs we are

again in the position, things

work out incredibly well,

they not be as nearly badly

affected. Probably won't be a strong case for

compensation. If the Rena

can survive another choppy

night authorities should be

able to resume pumping

tomorrow with the weather set

to clear for the rest of the

week. Let's take a look at

the forecast for tomorrow.

Showers and storms in the

west and north-east. Warm in

the south. Now back to David

in Canberra as PM Agenda

continues. Vanessa thank you

very much. As we mentioned

earlier there's more pressure

on electricity prices now.

Not just from the carbon tax

but we're being told from

getting riled of the carbon

tax allegation well. This is

a claim being made by some of

the electricity industry and

it's been seized upon by the

Prime Minister trying to turn the tables on the Coles in

this carbon tax debate saying

it's Tony Abbott who is now

the one to blame for

electricity price hikes. Here

she was earlier today. So let's go through the list of

what the coemtion is talking

about today. Destroying jobs,

electricity prices up and

more bureaucracy. That is

what the Coles is aiming

for. So just how much

credibility is there to this

argument that getting rid of

the carbon tax is also going

to put upward pressure on

electricity prices? It's a

claim being made by the energy suppliers association.

This is the body that

represents more than 40

leading power companies.

We're talking about low yang

power, delta origin, AGL.

What's that going to mean for electricity prices in the

meantime. Clare savage thank

you for your time. Can I

start by asking how concerned

you are about the Coalition

pledging to repeal the carbon

tax and urging business not

to invest in any future

carbon permits. Certainly, the energy supply association

of Australia has spent the

last four and a half years

advocating for the need to

put a price on carbon. The

reason we've asked for a

price on carbon ises because

we need to give some

confidence to future

investors in energy Strts

about what the future carbon

pricing ray Scombrem will be.

From our perspective it's

very important that generators have the

opportunity and the ability

to purchase forward carbon

permits in order for them to

be able to continue to offer

fixed prieles electricity

customer also to houses

hoedss and keep prices as low

as possible to customers.

What then does this

uncertainty about a possible

change of Government and then

a Coalition Government

repealing the carbon tax and

making any carbon permits worthless, what does that

mean for the industry right now? Any increase in the

level of uncertainty about a

future carbon price will

certainly make it more

difficult for future

investors to invest in the

much needed generation sector

in Australia. Does that have

an impact right now on

electricity prices? Our

concern is if Jen rairts are

unable to purchase forward

carbon permits, but any

issues with purchasing

forward carbon permits will

drive up electricity prices

unnecessarily because it will

reduce generators' abilities

to enter into long-term

contracts with customers.

Are you able to estimate what

sort of price impact that's

going to cause? Sure we had

some modellingings done and

they found even a 5%

reduction in electricity

contracting could result in a

10% increase for retail

prices for small household in

a single year and up to 15%

for large users. So we could

be looking at an increase of

as much as 15% as a result of

this uncertainty. Absolutely, and that's on top

of any increase from the

carbon price. The impact of

the carbon price itself, what

sort of impact do you believe

this is going to have on

electricity prices? The

Treasury modelings suggests

that the impact will be about

10% over the period to 2020.

The sort of impact we're

talking about is actually 10%

in a single year. That's why

it's crucial the legislation

is amended to make sure they

can purchase these permits

and don't have to pay for

them years before required.

Would you prefer there be no

carbon tax at all? We've

argued long and hard for a

long time now, four and a

half years to get a price on

carbon. It's important for us

that this legislation is

passed with amendments to

make sure that Australia has

a well designed emissions

trading scheme from 1 July

next year. Who do we blame

for any electricity price

increases now? Is it a pox on

both Houses the Government

for introducing it and the

Coalition for repealing it.

Certainly there is a need to

price carbon, and that will

have an impact on prices, the

Government and the Coles have

an opportunity to make an

amendment to ensure that

generators are not forced to

pay for their carbon permits

years before required and

this will minimise an impact

on householders. Thank you

for your time. Thank you.

Clair savage from the energy supplies association talking

to us a short time ago. After

the break we'll be joined by

Joe Hockey for more on this,

also a key part of the carbon

tax plan, should that be

dealt with on or off budget,

technical argument but it

could impact on the

Government's plans to return to surplus next financial year. Stay with us.

Welcome back to the

program. Just when you

thought the passage much the

carbon tax through the House

of Representatives last week

might end the endless debate

over this new carbon pricing

mechanism. Forget about it, the argument has shifted to

how the Coalition can get rid

of it and whether repealing

the carbon tax and telling

business not to invest in

carbon permits in the future

is going to push up

electricity prices. We just

heard then from the energy splice association that yes,

that is going to mean an

additional 10% for households

on their bill. Also today,

some confusion about whether

a key plank of the carbon

tax, the $10 billion clean

energy finance corporation,

the $10 billion green loans

scheme essentially is going

to blow out the budget bottom

line. An official from the

finance departments has told

us here in Canberra today he

expects it will be treated as

an on budget measure. The

Government though has said it

won't, the shadow Treasurer

Joe Hockey join us now. What

do you make of what the

finance don't officials have

told Senate estimates today?

This is a very significant

revelation from the

departments of frn. Wab said

emphatically the impact would

be in his words roughly

budget neutral. When the

carbon tax was re vealed they

said the cost to the bunchet

was $31 billion. They were

treating a $10 billion Bob

Brown bank for green loans

Heymans separate issue off

budgeet like the way they

treat the NBN. Now the

department of finance has

today revealed it will

probably have to be treated

on budget which means that

the real cost to the budget

bottom line is $14 billion

above what the tax is already

raising. That's a $14 billion

hole in the Government's

budget as a result of the

carbon tax. There's only two

Wales that can be funded,

David. One is they're going

to find another tax to fill

this black hole or the second

issue is they're going to

have a significant deficit,

ongoing deficit, structural

deficit in the budget for the

next four years and beyond.

Do you assessment though that

it isn't in the end to be up

to the finance don't to

decide whether it's treated

as on budget or offbudget,

this $10 billion, it's going

to be a Government

decision. No, it may well be

be a decision for the Australian bureau of

statistics. Quite clearly

other departments are

desperate ly trying to restructure the Bob Brown

bank to try and get it off

budget so that it does not affect the budget bottom

line. Whatever the case

taxpayers will have to find

another $10 billion to fund

this blow-out. That means

that we're facing higher

taxes or a surplus thatless

never be delivered. It's

quite ifenting, overnight

Wayne Swan in London is

trying to use the situation

in Europe as an excuse not to

deliver a surplus next year

and at the same time it's

being revealed that he's got

a $10 billion hole on his own

carbon tax. What does that

say about his so-called

honesty and transparency that

he's lecturing Europe about

when we find a black hole in

hills budget today. Let's

turn to your plans to get rid

of the carbon tax. We just heard the electricity

industry saying that your

suggestion that companies shouldn't be buying future

carbon permits is going to put upward pressure on

electricity prices, as much

as 10% for house hoefleds,

15% for business. Are they

right on that? No, I find it

rather odd when everyone including the Government says

electricity prices are going

up because of the carbon tax

by at least 10% the industry

should now say if you abolish

the carbon tax prices will

still go up even more than

10%. So I think their message

is confused. I suspect they

don't clearly understand our

position. The bottom line

from our perspective is that

if you don't have a tax on electricity then the price

should not go up. The

industry's argument here is

that big electricity

generators need to hedge,

need to buy permits more than

they need right now to hedge

into the future so that they

can provide lower fixed

electricity prices. With you

saying don't buy them because

they'll be worthless they

can't do that, and that means

the price is going to go up.

They don't have to hedge if

there's no carbon tax. But

there will be. It will be law

before you get into Government, presumably.

Well, let's just see, let's

just see. And let's just see

the timing of all this, so

much comes down to the

timing. I just heard that

representative from the

electricity supply industry

begging the Government and

the Greens to move an

amendment to the carbon tax

bill in the Senate. So I

think there's some way to go

in all this. What I do know

is there's now a revelation

that what was meant to be a

roughly budget carbon neutral tax is $14 billion in

trouble. Sure, but the

carbon tax, I mean you must

acknowledge, is going to be

law, it's going to go through

the Senate barring some xraorled political upheaval

in the next few weeks. It

then becomes law next year.

Companies have to live by the

law of the land. Of course

they do and they should. But

you know what David, everyone

says well just because it

passes through the Parliament

the Opposition should change

their policy. Well no, that's

not what we're doing. We are

sticking with our policy. We have been entirely consistent. We are opposed to

a carbon tax just like Julia

Gillard and Wayne Swan were

opposed to a carbon tax. The

difference is they changed

their minds and we haven't.

Why can't the Coalition say

we'll scrap the carbon tax

but we'll refund any

outstanding permits that

business might have, so we

don't have this situation and

maybe you could sell those

permits on international

markets once you got rid of

the carbon tax. Look David,

what you're putting forward

is a hypothetical situation.

We don't know how many of

those permits will be sold.

We don't know what the structure will be of them at

the moment. Quite frankly,

the legislation hasn't even

passed the Senate and you're

asking us to design a

detailed way of repealing it.

The bottom line is if you a carbon tax then electricity

prices don't go up. Simple as

that. Okay, but do you

acknowledge that your current

position telling them not to

hedge, not to buy the future

permits, do you acknowledge

that is going to put upward pressure on electricity

prices. No, I don't accept

that. I don't accept that at all. From our perspective we

are saying to the electricity

industry don't be a party to

what is a bad tax. Don't make

it easier for the Government

because the bottom line is Australians don't want a

carbon tax. We do not support

a carbon tax and if you're

party to the passage of the

carbon tax then be it at your

cost. And what about

individual, you're saying to

business don't buy these

carbon permits, should n't

you also be saying to

families and pensioners,

don't rely on the pension

increases and the tax cuts

you're going to get because

we'll get rid of those as

well. You'll see the detail

on that closer to the

election. What I do know

because of this revelation,

the clean energy fund is

going to be treated on

budget, abolishing the carbon

tax package will save the

Government $14 billion that's

what I do know. The tax cuts

and the pension rise, will

they stay or go. Just hear

me out. That will save the

budget $14 billion. Now the

Government has to find that

$14 billion hole somewhere

and it is going to come from

Australian consumers, from

Australian taxpayers. So the Government's taxation of

people has not finished in

the name of carbon dioxide

emissions. It has no finished

because there is now a $14

billion hole in the budget

that the Government has to

fund. All right, shadow Treasurer Joe Hockey we've

have to leave it there.

Thanks for joining us this

afternoon. Thanks very much

David. After the break our panel.

In a moment, our panel,

first let's check in on the

latest news head lines.

Here's Vanessa. Telstra

shareholders have voted to

shift the company's lines

infrastructure too the

National Broadband Network.

Share hoefleders at the meet

engine Sydney were told the

change would give the telco

financial security. The $11

billion deal will see Telstra

progressively shut down its

copper based network and

transfer the customers across

to the NBN Co.. The

electricity industry has

warned of inevitable power

prices increase if uncertainty continues over the carbon tax. Tony Abbott

has warned businesses not to

buy future carbon permits

because they won't be

reimbursed if he wins

Government and repeals the

tax. It comes as Julia

Gillard claims the Coles's

position will only lead to

higher electricity prices.

However, prices are already

forecast to rise under the

carbon tax, but most

Australians will be

compensated for the increase.

The Coalition argues the best

way to lower prices though is

to dump the tax. Lengthy

delays are expected for Sydney commuters this

afternoon after more than a

third of the city's

government businesses were

taken off the road. The rail

tram and bus union has forced

the action after video

emerged of a large fire on a

gas powered bus in July.

Drivers are now refusing to

operate the more than 700 gas

fired buses at five depots

across the industry. The

union has apologised for any

disruption but says the Saift

of the drivers and passengers

must come first. The company

of the stricken ship Rena has

pledged a million dollars.

The pumping of oil from the

contain er ship is ex pected

to resume once the weather

clears. Authorities warn the

next 24 hours are crucial.

Rough seas are forecast with

real fears the ship will fall

apart. Robbie Deans says he

wants the Australians to play

well in in the final game of the Rugby World Cup campaign.

Sky weather, showers and

storms in the west and the

north-east. Warm in the

south. Well come to our

panel this afternoon. I just

want to pick up. It is a bit

of a technical rg argument about this clean energy

finance fund. The key part of

the carbon tax, Joe Hockey

telling us a little bit

earlier this is going to put

a $10 billion hole in the

budget bottom line. It all

comes down to whether it's on

budget or off budget. The

Government will make sure

it's off budget I'm sure at

the end of this process. Does

it create a bit of a headache

around this thing? I think

it does. There is a real

problem where the Government

obviously its 2012/2013

budget is a key, it's the

only one they've got left.

They're trying to decide how

they do this. Now a $10 billion hole is a real

problem. It is clear from

what finance has been saying

they seem to think it should

be on budget. If it is Joe

Hockey haletion a real point.

If the Government can get

finance just to pull back a

little then they're better

off. It's a political problem

and it could be a real

budgetary problem. This $10

billion fund was the key

difference between Kevin Rudd's carbon reduction

scheme and this carbon tax

which has the Greens on side.

It was in many ways a $10

billion deal to get the

Greens on side. The carbon

tax remains a hot topic in

the sense Tony Abbott is

telling businesses not to buy

any carbon permits in the

future. They'll be worthless

once I come into power. We heard the industry saying it

is going to put upward pressure on electricity

prices. He's not about to

change his tune on this. No

we've been told the lack of

certainty has been the driver

between rising prices. Tony

Abbott is maintaining that uncertainty. It's a straightforward argument from the industry sector and other

people in this field.

Abbott's trying to head off a

problem down the track should he become Prime Minister having to compensate

companies for these permits,

so he's putting that concern

ahead of the industry's

concerns about power prices.

And you know, he's not in the

habit of backing down. He's

not going to shift on this.

It is hard to believe that

the carbon tax itself would

put it up 10% but the uncertainty about get can rid

of it would put it up another

10%. A lot of this has got

to do with the long temple

investments and whether they make the investments and when they make the investments.

That's the real problem. I

think Tony Abbott has got a

real issue here. He has said

we're going to rescind it no

matter what. It's a bit like

the boat phone. We'll turn

the boats back when safe.

When it comes down to

actually practically doing

something, it's very easy for

an Opposition to say yes,

we'll do that. It's another

matter how you're going to do

it. He said we'll get rid of

the whole carbon tax even if

that means a double

dissolution. Don't buy any of

these permits. But I think

what he has to do now, and

pretty quickly, is spell out

how he actually intends to

get around this problem, not

just as a business uncertainty but of the

permits. This is going to be

the law from next year. It's

going to be implemented.

Business has no option, they

have to buy permits It's

whether they buy the future

permits to hedge. You

envisage them doing that.

That's how business works.

There's plenty of people

saying the Government will

have to compensate them. Not

only is that politically dangerous but also it will

have a budgetary danger as

well. That again is why he's

saying don't do it, don't do

it. He's doing it again with

this $10 billion scheme,

we're not going to honour

grants out of it, they're

going to can the whole scheme

if they get in. It's all

trying to kill this thing by

killing enthusiasm for it.

What does industry do here?

The polls show that Tony

Abbott will be Prime Minister

and these loans, do you take

them, the carbon permits, do

you buy them? I think the

issue of renewable mandatory

renewable targets is a much

fairer area for Tony Abbott

to attack. They are areas

that do distort the market

and so forth. The $10 billion

fund was one which the

Government used to buy off

the Greens to get their

agreement. There is more

legit ma cy to attack that. I

think the carbon credits is a

different matter. Of course

in the short term the carbon

credits are free, it's this

hedging issue, that's where

the whole pressure on if you

can't hedge the price goes up

so that you have a higher

price if you can't hedge. In

the end we all pay higher electricity prices. No

matter what. The NBN Telstra shareholders gave it a big

tick today. Here were the

Telstra bosses today. It

does provide us with a unique

opportunity to accelerate the

investments in this is next

generation of technology.

This still has to go through

the competition watch doing

but it's another -- watch doc

but it's another big step.

It makes it harder to get rid

of the NBN I guess. Another

bobby trap. Obviously

Telstra shareholders will be

all for this. It's a bit of a

break for long suffering

Telstra shareholders, it does

make it that more difficult

to repeal the NBN and another

roll back issue for Tony

Abbott. And the problem

starts to come, it works two

ways. People are upset at the

idea of the Government

putting poison pills in to

the carbon tax so it can't be

repealed. But then Tony

Abbott has to be careful,

after all it was Julia

Gillard's decision to go back

on her promise which

absolutely destroyed her

credibility and that's -

he'll face the same problem

if he can't keep a pledge

he's written in bloodment.

There will be no NBN under a

Government I lead, words to

that is effect. The break

down over the Nielsen Poll shows

men have been driven off, why do you think the Prime

Minister has a problem here?

I have no idea. You'd have to

ask each and every one of

them. I'm convinced there's

an elements of miss

honourable gentlemen any

there. I don't think that's

-- Mysogeny. Other than that

I don't have a clue why they

don't like her. I think the

key here is not so much that

Julia Gillard has a problem with men or women but with

voters, if you have a look at

when this problem began with

men and this is the same with

the Nelson poll and Fairfax

and in the Newspoll in the

Australian the problem began

in February when she

announced the carbon tax and

men who were employed, particularly those in manufacturing and the steel

works that Tony Abbott's

appealed to were turned off

first and as time has gone

on, women have become more

concerned about the household

impact of price rises. So

what you've actually got, I

hate to sound sexist about it

but the men are still largely

the bread winners, they were

the ones who felt the fear first about the carbon tax

and the effect on jobs, now

the women who have to manage

household incomes are feeling

the fear and the pressure of

rising prices. I don't think

it's actually got a great

deal to do with whether women

like Tony Abbott or dislike

Tony Abbott or men delieck

Julia Gillard, I don't think

they like what they're

doing. No-one seems to like

her much at the moment. Your

cabinet leaked story from the weekend, Phil has really push

ed along the leadership

chatter a bit more in the

last few days. Most of the

Labor MPs I've been talking

to, grudgingly some of them

seem to be coming around to

the realisation she can't

survive as leader. This has

been around for a while. I

guess it's interesting,

no-one ever talks candidly

now about Julia Gillard

leading them to the next

election. It's more about if

we have to do something, when

and who. But if she can get

the primary vote back into

the low to mid 30s by

Christmas I think it will buy

her time and may change that

thought. Will she get to Christmas? There's two weeks

you need to watch out for,

there's a sitting week then

an optional sitting week, by

then all the overseas travel

will have been done with.

Might be a sitting week

before Barack Obama comes

too. By the time you get all

the necessary legislation through the parliament

there's a dangerous couple of

weeks hanging around just

before national conference.

Which ifs there were to be a

move this side of Christmas

that's when it would happen.

I'm not picking up the

momentum is there. Someone

said to me when you're

sitting on 26, 28 paras.what

else do you talk about. But

there's still a very strong

resist ance towards Kevin

Rudd coming back. If there

were unanimity behind Rudd

coming back I think things

could move. That inbuilt

resistance to him returning

will delay things if at all.

I think one thing that has,

and people are now using the

words inevitable. Partly this

is deliberate so they're

saying Julia Gillard is

terminal, it's inevitable,

it's going to happen, it's

just a question of when. So

that they're trying to build

this idea she's finished.

That makes it easier for

Kevin Rudd and/or Stephen

Smith. I think the important

thing that's come out is what

is almost open promotion of

Stephen Smith as an

alternative to Kevin Rudd.

Not as an alternative to

Julia Gillard but an

alternative to Kevin Rudd. So

the other half, the right that are looking at Stephen

Smith are assuming Julia

Gillard will inevitably go

and they're already building

an alternative candidate to

Kevin Rudd who they see as

the logical challenger in that sense. I think that's

the real danger for Julia Gillard is that now they're

starting to look at other

candidates because they're

accepting the intaef tability

of it. There again the messiness delays anything

happening because you develop

a stand-off. And a little

internal numbers games.

Something we'll talk about

more over the coming months.

Of after the break a very

different topic, the Queen

arrives in combras tomorrow,

the capital being spruced up

for the visit. We'll be

talking to two royal reporters about the significance of this visit.

Yes,, the royal tour, expect

to see a lot of that over the

coming weeks. The Queen

arrives tomorrow here in

Canberra. She will ambulate

in the day, this time tomorrow. You can watch it

all live here on Sky News and

indeed the royal tour while

Her Royal Majesty is here in extra, in Brisbane, in

Melbourne, in Perth for the Commonwealth heads of

Government meeting as well. A

look ahead at the trip and

what we can expect we're

joined by Jonathan Samuels

from Sky News UK and Roger

Maynard from the 'Daily Express'. Thanks you both for

joining us. There will be a

lot of attention here on the

final visit here to Australia, that's how it's

being billed, perhaps not

official ly. But a lot of

nostalgia around this perhaps

being her final visit at 85

years of age. Will it be the

final visit and how significant do you think it

is. Roger Maynard first to you. I don't think

necessarily it can be ruled

out it is the final visit. I

remember seeing Her Majesty's

visit seeing her plane go off

and thinking that's the last

time, but now she's going to

be here again. How is her

health then? This is the

question. She's not getting

any younger. She is a strong

woman. Remember the Queen

mother, she lasted until 101,

102, wasn't it. Certainly the

Queen seems to be as strong

as her mother. Certainly she

looks as though she's brimming with health,

although I know she had a

cold last week, we all get

colds. Certainly she's a

strong woman, she's stout.

She just goes on and on. If

she wasn't capable of doing

this trip obviously she

wouldn't be going to

Canberra. Clearly her

advisors say yes, you go,

you're up for it. Johnathan,

not just Canberra, a few days here, then Brisbane,

Melbourne, over to Perth for

the Commonwealth heads of

Government meeting. Is this a

busy itinerary for the queen

compared to other trips she does? I guess you have to

look at it like this. It's 10

very packed days. She's coming all the way from the

UK. I find it exhausting

flying to and from the UK so

I'm not 85. There are obviously going to be breaks

in there so she and the Duke

of Edinburgh who's now 90 can

have a rest and take stock. Certainly there's a lot of

miles to be covered. It's not

going to be anything like the

first time she came. Back in

1954 she was here for almost

two months and covered a huge

part of the country, about

75% of the population, it's

been estimated came out to

see her. Shoo we're not going

to see anything like that

this time. Certainly it is

going to be a packed

schedule. Very interesting for reporters to cover these

sort of events. There's a big

press contingent coming out

from the UK, other people

like myself who are based out

here in Australia covering it

as well. Of course a huge

appetite back in the UK for

many things royal, they'll

wants to know what the Queen

is wearing, what she's doing,

who she's meeting. Lets we're

there to cover the things

that perhaps the palace don't

want us to see, maybe the odd

gaff from the daourk of

Edinburgh, the odd break in

protocol. Roger will remember

Paul Keating touching the

Queen's back. I was going to

ask you, is that what

reporters such as yourself

will be looking for? What's

going to be of most interest

to your viewers and reading

back home about this visit?

Look, I'd be lying if I said

that we weren't looking out

for those sort of moments, of

course we are. In these

details of 24 hour television

rolling news coverage every

second will be picked up on.

There may well be an occasion

that hits the heldlines like

that despite the palace doing

their best to keep those

moments hidden from us. It's

really 50/50, there will be

huge interest in what the

Queen's wearing, huge

interest in cute children

giving her poys of flowers.

That doesn't necessarily make

headlines, they may consist

of something else. Roger

what are you looking for in

this trip? Os ten Sib ly, I

hate to say this, it looks a

bit of a boring trip. She's going to Canberra. We know

Canberra can be a bit

boring. Let's not goat into

that argument right now. The

events up in Brisbane and

Melbourne, they're important

events, she's going to see

people involved in the flooding up in Queensland

earlier this year. Obviously these are important events

not to be underestimated but

will there be any fun? I'm

not quite sure really.

Hopefully there will be some

fun. Perhaps unintentional

fun, we don't know. I'm sure

when she goes on the

Thursday, then there will be

a little bit of interchange

between the public and her

and there will be laughter

and a bit of conversation

too. So that will bring the

tour alive as well. But I

think on the face of it it's

a fairly sort of

straightforward tour. The

queen's not doing a huge

amount. She's having these

away days to Brisbane and Melbourne rather than

actually staying in those

cities . She's not going to

be on the move all the time. She's going to have several

hours a day to herself to put

her feet up if she wants to.

It's not going to be too

demanding from that point of view except of course when

she goes to Perth when she

does have a very packed schedule at the Commonwealth

leaders' conference. Let me

ask you this, there is a

strong republican streak in

Australia, perhaps not as majority republican streak at

the moment. Does it surprise

your readers and viewers in

the UK that Australia is

still a constitutional

monarchy, the Queen is still

a head of state. I think it

surprises many Britons that

we still have a monarchy in

the UK. It certainly

surprises lots of our viewers

that Australia does. You have

an elected head of state

who's a foreigner who comes

over once in a blue plaon.

That does seem very strange

to us. What's the

alternative? A President? Who

are you going to have as

President. Maybe President

Edna Everidge, I agree

there. When it comes to the

republican issue, when I

first came to Australia in

the late 08s, early 90s, the

republican issue was quite

high on the agenda. There was

Paul Keating, he was an avid

republican. It was an edgy

subject. Now it's gone off

the agenda to a great degree.

In fact, the latest opinion

poll suggest 55% still

support the Queen as head of

state. You've got to take

that into consideration.

Remember the referendum in

1999. People did not like the

idea of politicians electing

the President. That was the

issue that stopped the

republican thing from getting

up. And I don't think they've

changed their mind now

either. The Government of the

day certainly don't want the

people to elect the

President. There's a bit of a

conflict of interest there. I

doubt whether we'll see the

republican issue back on the

agenda again for several years. Essential the Prime

Minister has said it's not

likely to be considered until

after the Queen dies and that

could be many, many years

hence. Just a final

question, Roger, we know the

Queen takes her

responsibilities very

seriously. Do you think she

also gets a kick off goings

to the Commonwealth heads of Government meeting where

you've got 54 members of the

Commonwealth she and she's

reigning supreme. Certainly

she regards the Commonwealth

as an important organisation,

she takes her meetings with

the heads of state from

around the world as part of

her duty, and part of her responsibility as the

sovereign. She enjoyings

meeting these people and she believes that the

Commonwealth has an important

role to play on the world

stage. She certainly supports

it in every way. She'll want

to see all those people at

that conference and she'll

want to meet as many heads of

state as possible and have

meaningful talks with them.

We look forward to both of

your reports over the coming

couple of weeks . Really

enjoy you joining us this

afternoon for a preview on

this royal visit. And of

course stay with us right

here on Sky News for all the

coverage of this royal tour, kicking off here tomorrow

with the arrival in Canberra around about this time

tomorrow. We'll be live to

air as the Queen touches down

here in Canberra and across

the next couple of weeks. Do

stay with us. We're out of

time for today's show. Stay

with us after the break. The

very latest Sky News. Live Captioning by Ai-Media.