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This is PM Agenda

Hello welcome to the

program. I am Ashleigh

Gillon. Every year the

Treasurer warns us the upcoming budget will be a

tough one. But often Wayne

Swan's rhetoric is stronger

than his cost-cutting. This

year however if the

government is going to

achieve its goal of a

surplus, Mr Swan is going to

have to deliver. Coming up on the program we will look at

which programs could face the

axe, and how this year's

debate over economic

credibility is shaping up. Today one budget measure has

already been revealed. With

more than $1 billion of new money going towards

indigenous programs in the

Northern Territory. A little

later we will speak with the minister responsible, Jenny Macklin. Also the Prime Minister promised today that 3.5 million Australian

to the national broadband properties will have access

network, within three years.

But the program has already

suffered delays. So can we

trust that the NBN will stick

to its time line? I will

chart with the Communications

Minister Stephen Conroy. That's all coming up but

first a look at the day's

other news with Susanne centre. Latimore, in the Sky News

Thanks the body of missing teenager Matthew Barclay has

been found on the Gold Coast.

Family and friends were

clinging to hope that the

14-year-old would be found

alive. After he was knocked

from a board at the national

surf life sieving championships, the carnival

on the Gold Coast in

Queensland claimed the life

of another swimmer two years

ago but organisers say the

event may well continue this weekend. Inflatable dinghies

Kurrawa Beach on the Gold crisscrossed the waters of

Coast. Two helicopter the

joined the search for 14-year-old Matthew Barclay,

who was knocked from his

board during the surf

competition late yesterday.

Dune buggies searched the

shoreline while club members

watched hoping for good news.

It didn't come. We do have

people talking to the family.

It is understandable how they

must feel and my heart goes

out to them. The death of

19-year-old Saxon Bird during the same carnival at the same

beach two years ago prompted questions about the safety

measures adopted by the carnival. Surf Life Saving

Australia was quick to reject

talk that the organisation

was put in competitors lives at risk at unsafe beaches

because it depended on huge

sponsor contracts. That is a

comment that continually

seems to arise out of a few

mouths. The coroner last year

unpacked every commercial interrogated forensically

contract. The coronial

enquiry into the death of

Bird did recommend

competitors use some kind of

floatation division, that is

still being reviewed by surf

life saving. The coroner

asked us or told us as one of

his recommendations was to

work with designers of safety

equipment. To come up with a

- to try to determine and

come up with some suitable safety, further safety

equipment. The lawyer who

represented the Bird family

at the inquest reacted

angrily saying Kurrawa Beach

should not be used for the

national competition. The

safety of the competitors, is completely secondary to the commercial undertaking. There

is about $15 million worth of

sponsorship for these

championships. Just two weeks

ago Matthew Barclay won two

junior championships on the gold medals at the Queensland

Sunshine Coast.

Sky News reporter Tom Connell is at Kurrawa Beach

and filed this report. The

empty grandstands at Kurrawa

Beach tell a story, the 7,000

people due to compete at this

year's event thrown into

shock by the death of 14-year-old Matthew Barclay,

after the 18 hour search

ended in the worst possible

way. Tributes are flowing in

from friends and family, and

those from Maroochydore surf

club where he was a poblar

member. Questions now even

allegations are being asked

and made including by the

inventor of an inflatable

rash vest who said it could

have saved his life. We have

been invited by Australian

surf life saving to test and

trial our products which is the world's worst inflatedable rashy, it was

tested and trialled at this

very beach after the death of

Saxon Bird we were told there

wouldn't be another death

Surf Life Saving Australia. during events. This was by

Now, after they tested and

trialled our shirts, they

implemented the wearing of a

high visibility shirt. Or

vest. Not inflatable like this gentleman just said they

were going to implement an

inflatedable vest. OK to this

date I have still not heard

from them. Surf Life Saving

Australia say the rash vest

is being looked into, as is a

possibility of competitors

wearing hell Mts and also

tracking devices. Moon while

the sister of Saxon Bird the 19-year-old killed here two years ago says Kurrawa Beach

should never even be the

venue for this event but Surf

Life Saving Australia say

this event is no more

dangerous than many across the Gold Coast and if the

event was banned from here

they would have to look at closing the beach and others

Government programs and to the public .

chopping block as the services are set for the

Treasurer prepares what he

says will be his toughest

budget yet. Wayne Swan says

cuts are the only way to

achieve a surplus next year

in the face of another hit to

tax receipts. Tough budgets

come with the territory. I'm

not talking here about slash

and burn. But it's clear the

Treasurer is sharpening the

axe. The reality is we need

to cut and cancel existing

programs if we are to meet

targets. By targets he means

a surplus in the next

financial year. Along-held

promise that is getting ever

more difficult to keep. This

surplus will be much harder

to achieve because of substantial revenue write downs and historically low

tax levels. A slump in

company profits has burned a

hole in the tax man's pocket

and although the mine sector

continues to boom the

Treasurer says the tax

deductions are historically

high and also warns the pre

gfk wind fall from capital

gains tax -- GFC windfall

from capital gains tax due to

soaring shares and real

estate is unlikely to

return. The pre GFC world is

never coming back. Despite collecting less tax the

government remains determined

to deliver a surplus in 2012

perfect 13 but is trying to

refrain the perception inspect is about a political promise rather than what's

best for the economy. For too

long there has been a

misleading and ill informed

claim which has been doing

the rounds that our determination to reach

surplus is a political

strategy and not an economic imperative. This is

rubbish. It is in the

interests of families right

around the nation that we

bring the budget to surplus.

There couldn't be anything

more in their interests. It

is very important we have a surplus but we should achieve

the surplus by getting government spending down not

by putting taxes up. And

this is a government which is

addicted to more taxes, more

spends, and more regulations. The budget is

almost six weeks away, but

the ground is already being prepared.

prepared. The Prime Minister has announced

details of the three year rollout of the national broadband network across Australia. Under the plan

more than 3.5 million homes,

businesses and hospitals will

have access to high speed broadband network by 2015.

It is the largest phase of

the NBN rollout so far. In

three years time over 3.5

million premises will be

connected to or in the

process of being connected to

the national broadband

network. The three year

rollout begins next week. NBN says in NSW there will be

more than 1 million premises

covered. Victoria and

Queensland, nearly 700,000.

With less in each of the

other states. Which means

hundreds of thousands more

premises will have access to

the NBN by the time of the

next election due late next

year. Embedding the broadband

network further and making

any opposition plans to scrap

it more difficult. If you're

expecting to get the national

broadband network and the

government changes at the

next election you can forget

it. There will be no broadband under Tony

Abbott. There be of course be

broadband under any Coalition government, the Opposition

has its own plans for high

speed broadband too, albeit

less ambition and less

expensive. The NBN says

suburbs have been chosen for

the rollout based on engineering requirements and a balance between city and

country but politics he says

didn't play a part. The

planners had no idea of

electoral boundaries and not

even interested. So I can

assure you that wasn't any of

the principles. The Chinese telecommunications I impant

Wa Wey won't be playing any

role in the NBN the Prime

Minister is adamant the

government has made the right

decision on excluding the

telco on security grounds based from advise from

ASIO. I have stood up for Australia's national interest, I note the Opposition is standing up for the interests of a China ice

company -- -- Chinese company. The federal

government has announced more

than $1 billion for

indigenous programs in the

Northern Territory. It is the second major pre budget

announcement to be made in as

many days to fund the new

stronger futures laws. $1 billion announcement for

indigenous affairs in the NT

was child's play for federal

government ministers.

Indigenous affairs minister

Jenny Macklin and indigenous Health Minister warren

Snowden put politics aside as

they played with children who

are set to be the recipients

of much of the spend. The

first announcement was of

$719 million for primary

health care, dental, and allied health services. Providing for additional primary health

care services employing over 250 health professionals across the Northern

Territory. Providing ongoing

funding for the remote area

health care. Providing

ongoing care funding for

primary health care reform for regionlisation of health services. The funding will mean certainty for

intervention related programs

due to end in August. But

it wasn't the last

announcement of the

day. Minister snow den and I

are very pleased today to be

making a further announcement

of more than $440 million

over 10 years for families

support initiatives. Those

initiatives will include

early learning and literacy

programs, parenting and family support, and child

nutrition. It will also support already established

programs. The federal government has announced more

than $2 billion of announcements in the last two

days to be rolled out over

the next 10 years. That will

mean a spend of almost $20

million per year. Former

AFL star, Ben Cousinzs could now face jail time after

being arrested twice in 24 hours, more from Ahron

Young. The 33-year-old was

first intercepted by

detectives after stepping off

a plane inness parrance on

Tuesday night he was

allegedly carrying 4 grams of

methylamphetamine that was

concealed internally it is

believed police had him under surveillance for several

months, he was arriving there

to appear at a teen

rehabilitation centre, the

foster Richmond and east

coast star was charged with

possession with intent to

sell or supply and was

bailed. But he breached that

bail after attempting to flee the southern Western Australian city and is said

to appear in a Perth court on

Monday. The maximum penalty

for the offence in WA is 25

years jail, or a fine of $100

0,000. Queensland police say

a fire which destroyed a

Brisbane lifeline store

appears to be suspicious. The

blaze broke out just after 3

a.m. at Woolloongabba and quickly engulfed the entire

building plus a warehouse

behind the store. Local

residents had to be evacuated

because of fears the fire

could spread. It would pa

pare to be suspicious -- it

would appear to be suspicious

purely because there is a lot

of furniture left out the

front as there normally is at

Lifeline stores. It could 60 firefighters two hours to

bring the fire under control

P Nathan behind march is

expected to announce he will

-- Hindmarsh is expected to

announce he will retire at

the end of the season, Cooper

Cronk has inked a new deal with Melbourne today but has

refused to say how much cash

he knocked back to go elsewhere. Sky News Melbourne reporter Loretta Johns was at

AAMI Park. Flanked by the

coach and chief, Cooper Cronk

finally ended the speculation

surrounding his future. Like

all families I have had my

moments with Melbourne Storm, moments I wish never happened

but I have been lucky enough

to be able to balance those

sad moments with others that

I will remember for the rest of my life.

of my life. In my heart I believe the best of Melbourne

Storm is yet to come. Cronk

had been in the sites of the

Dragons and cash strapped

Titans but last night the

Storm court secured his

future on a new four year

deal believed to be worth

around $2.6 million. The

elephant in the room is yes

there is money involved in any negotiations for any

football of any code, but for

me like I said before, it's

the biggest challenge in what makes me the better person. And I think this club

gives me that opportunity in

bucket loads. Cronk says he

enjoyed the bidding war for

his services, a sentiment not

shared by Craig Bellamy but

the Storm coach says the star halfback remained professional throughout the

process. He was great putting

that aside when it came to

training and playing and like

I say you wouldn't know he

was going through that

process. The Storm says

Cronk's deal is well within

the club's salary cap. And the weather forecast for you:

It is back to Ashleigh

Gillon and 'PM Agenda'.

Thanks, after the break we

will look at the government's

big NBN rollout announcement

today. The Communications Minister, Senator Stephen Conroy will be my guest.

Welcome back. Within three

years the government is

promising $ 3.5 millol

premises will have access to the national broadband

network, if you live in NSW,

Victoria and Queensland there

is a good chance you're

included in thosefy figures,

some Tasmanians are also

connected but progress will

be slower in WA and SA. There

will be a group of

Australians who will be

waiting much longer. With the

network not expected to be

completed until 2020. Attending the launch of what

is the biggest rollout stage

so far, the Prime Minister

defended the time it's taking

to build the NBN, which has

suffered delays already.

From a commonsense

perspective in terms of

rollout in Australia we are a

very big country and so you

would expect that needs for rollout are different than

some places in the world

which are much higher

population density. And much

more geographically compact.

A short time ago I spoke

with the Communications

Minister Stephen Conroy.

Minister, thank you for

your time. How much of the

country will have the NNBN

within three years and how

did you prioritise which

parts of the country get it

first? Can you guarantee marginal seats didn't factor into that decision at

into that decision at all? Look, I think Mike Quigley gave a very clear

explanation of the algorithm,

the need to try to get right

across the country balance it

across the states and if you

look at the number of

electorates that are covered

it is 139 electorates out of

150. 139 out of 150. There is

one state however that I have

not been able to build any

NBN in a Liberal seat in

Tasmania. Because there

aren't any. So yes, it is

possible to accuse us of not

building in a Liberal seat in

Tasmania because there aren't

any but 139 demonstrates it

is such a massive. More than

3.5 million homes, schools,

hospital and businesses are

getting covered. So almost

every electorate is being

touched by the national

broadband network, and will

eithering completed the

construction and connected --

either be completed and

connected or under

construction by June 2015. So

this is an enormous project that spans all of Australia. How many homes are

connected right now? I think

there is about 2,700 using

the fibre at the moment and

around 5,000 using a

satellite and each day you

ask them, each time you talk to me that will be a new number, it will be increasing

and the demand is increasing

now we have moved into the

volume, the ramp up that we

have been waiting to get

under way while being

completing the deal with

Telstra and importantly

getting the ACCC's regulatory

approval. Now that's all

behind us the volume rollout

is about to commence, and we

are very excited, we are

starting to see the interest,

I was meeting with a chief

executive of one of the

telcos yesterday and he said

to me 12 months ago it was

no-one was interested, they

didn't know enough about it

now people are phoning into

his call centre to say when are you connecting me to the national broadband network so

you are going to start to see

the live connections start to

take off over the next 12

months and as we move into

the volume rollout I think by

the end of the calendar year, 750,000-odd homes will be under construction or connected so that's the sort

of interest. And the other

thing to remember is that we

are closing down the copper

network. So 18 months after

we complete the rollout into

an area, we will be closing

down the copper, and

everybody who wants a fixed

line will be transferring on to the national broadband

network. -- And as Mike

Quigley ind kapted today,

David Thodey and himself have

been having conversations

about trying to shorten down

that time and bring the close

down even quicker than the 18

months. Why should we trust

the targets you have outlined

before when previous targets have fallen short. For

example I believe the initial

plan in 2010 said by this

June 300,000 hoemds will be

hooked up and that will not

be the case is it? That plan

was based on an agreement

with Telstra that would be

completed nine to 12 months

ago and regulatory approving

will be completed nine to 12

months ago, obviously the

deal with Telstra was very complex, the government

weren't going to roll over

just to try to get this done

quickly and sacrifice

taxpayer dollars to Mike

Quigley in the NBN team got a

fair deal in the end. By

definition when we say it was based on ex houses connected

it was based on a start date that did not take place

because of the Telstra deal

and the ACCC required

approvals. You said in your

speef today if Tony Abbott becomes Prime Minister -- speech today if Tony Abbott becomes Prime Minister the

NBN would be dead. That's not

really right... That is

absolutely root. The national broadband network is about

fibre. He they said they will

conduct a review about the

most efficient way to go

forward if they do win government. First of all the

NBN will be dead, we said we

will build fibre to the home

of 93% of Australian premises, the Opposition said

they will demolish it and not

commit to that figure. So if

you were on in this plan the

only way you were going to

get this three year plan, the

only way you are going to get

fibre to the home is if you

vote Labor bass Tony Abbott

said he will stoch it. Even if the Coalition did want to

stop it how difficult would

it be for them to do that

considering all the long term

contracts you have signed. Neither political

party is going to engage in

sovereign risk and I Malcolm

Turnbull's comments they will

honour all existing

contracts. Mr Turnbull will

indicate that but no-one is

suggesting we will lock in a

10 year construction

contract. New research by the

economist intelligence unit

found $36 billion the NBN has

been the most expensive rollout of its kind in the

world. When we just had Wayne

Swan this morning outlining

just how tough this year's

budget has to be in a bid to

reach a surplus why is it that the government is

prioritising the NBN? Why do

we have to spend so much on

rolling out this network? Well, firstly it is

not on budget so it doesn't

have a significant budget

impact. There is a small

interest rate, interest payment cost that's on

budget. That's it. Very, very

small in terms of the $37

billion cost or $28, $27

billion government equity but

let be be clear as I have

done before, the economist

intelligence unit starts with

incorrect assumptions, it

gets the speeds wrong, it

gets the coverage wrong, it

then does maths based on

wrong speeds, wrong coverage

and I have pointed this out

to them before, and then it

makes what I can only

describe as a serious

economic right wing dogma

attack saying that on a

rating of zero to 20 you get

zero as a rating if you have

any government investment.

Well we reject this

totally. Why has the Chinese

technology company Wa We been

blocked with working on the

NBN. As the Attorney-General

and Prime Minister have said

we have taken the proper

advice from the proper

agencies we have gone through the proper processes and we

have made a decision we

believe is in the national interest. As the Prime

Minister said earlier

today,... It was a security

threat? I am not prepared to

comment. I simply say we have

taken all the advice, gone

through the proper provisions

from the relevant bodies and

made a decision that's in Australia's national interests to go down this

path. Are there specific

concerns about this company

or are all Chinese companies

ruled out? Look, that's not

an issue that's come up I am

not going to speculate on

hypotheticals, we have made

this decision because the NBN

is a critical piece of

national infrastructure. We

have made a decision based on

all the available evidence, and information. And we are

not speculating on any future possibilities. Isn't the

government sending mixed

messages where on the one

hand you have Bob Carr saying

Wa We should be encouraged to grow operations in Australia and the other the company being banned from being

involved in in the country's

largest infrastructure project. No, China spefl

raise telecommunications as a

special interest sector in

its own country. And we

welcome foreign investment,

wes whether Wa We's

investment in all other areas

it's investing in but we

believe we have taken a

decision in Australia's

national interests, the Gillard Government is

standing up for Australia's

national interests, the Opposition are standing up

for a Chinese company --

Will your department be

examining claiming concerns

the News Corp subsidiary NDS

and allegations of

piracy? Look, my department

doesn't have a role in this.

There are a whole range of

information out there, the

appropriate authority if an

authority is to look at this

will be the ACMA. And they

are the appropriate body,

they are an independent

statutory body and you might

want to put questions about

those sorts of issues to them. My understanding is

that a US court has already

rejected these allegations,

is it your view there is

further evidence that has been uncovered that hasn't

been examined in the US that

should be looked into? Well,

look it's not for me to judge

what's relevant in a US court. I don't know enough

about the case, I don't know

enough about the underlying

arguments. What I can say is that the Australian

Government has not referred

any matter to the Australian Federal Police, the Australian Federal Police

have said they have not received any references when

it comes to this. And they have indicated obviously

there is an ongoing matter

that they are giving support

to with the UK police, but

other than that if the

Australian financial review

which is the source of all of

these information, they have

gone through the 14 this,

e-mails if they believe there

is -- 14,000 emails if they

believe there is anything that needs to be referred to a criminal matter to the police they should do so. Just to clarify the government will not be

referring these allegations

to the AFE? As I said, the

government has not made a

referral, if the... And you

won't be making one? If the

AFR have got any information

they believe is about criminal conduct in Australia

they should refer it to the

Federal police. But, I

believe in the AFR are not

suggesting there is any

criminal conduct that would

lead to the Federal Police at

this stage. I can't speak for

the AFR you're best placed to

put that to them. The Greens

are calling for the Austar

Foxtel merger being put on

hold as a result of these

allegations are you rule that out? The ACCC are going through the prop of processes

and they will consider all

the evidence and those are

questions as an independent statutory authority rightly

but to the ACCC and we won't

be interfering in these processes. I appreciate your time, thank you. Thanks very

much. If you would like to

check out when your suburb is

due to be hooked up to the

NBN you can visit the NBN

Co's website. They have ul at

details there. Coming up

after the break, we have

heard the Treasurer in the

past warning of tough budgets

but does he really mean it

this year? Economist and

form er Gillard adviser

Steven Koukoulis will join us next.

Welcome back, let's check today's top stories with Suzanne at the Sky News centre.

The body of missing teenager Matthew Barclay has

been found on the Gold Coast.

Family and friends were

clinging to hope the

14-year-old would be found

alive after he was knocked

from a board Australian Surf Lifesaving Championships the

carnival on the Gold Coast in

Queensland claimed the life

of another competitor two

years ago, but organisers say the event may well continue

this weekend. The Prime

Minister has announced

details of the three year rollout of the national broadband network across

Australia, under the plan

more than 3.5 million homes,

businesses and hospitals will

have access to high speed

broadband network by 2015.

Treasurer Wayne Swan says

government programs and

services are set for the chopping block as the

Treasurer prepares what he

say also be his toughest

budget yet. Mr Swan says cuts

are the only way to achieve a

surplus next year in the face

of another hit to tax receipt, the federal

government though maintains

it will reach a budget surplus by 2012-13. Queensland police

say a fire which destroyed a

Brisbane Lifeline store

appears to be suspicious. The

blaze broke out just after 3

a.m. at Woolloongabba and

quickly engulfed the entire

building plus a warehouse

behind the store. Local

residents had to be evacuated

because of fears the fire

could spread, it took 60

firefighters two hours to

bring the fire under control.

Surgeons in the US have

performed what they say is

the most comprehensive face

transplant ever. Patient

Richard Norris was injured in

a gun accident 15 years ago

he has been given a new face,

jaw, teeth and part of his

tongue in a marathon operation lasting a day and a

half. Doctors say he is

recovering well. And Cooper

Cronk has confirmed he will

remain with the so storm for

a further four NRL seasoning

ending speculation he was set

to take up big money offers

from interstate. The

28-year-old turned down lucrative deals. The weather

tomorrow:

It is not even April and the flurry of budget

speculation is well under

way. This morning the

Treasurer, Wayne Swan, said

the up coming budget will be

his toughest one yet. Of

course we have heard that

before but this time Mr Swan insisting cutting programs

will be necessary in order to

deliver on his promise of a

budget surplus. I'm not

talking here about slash and

burn. I'm talking about responsible additional

savings. The reality is we

need to cut and cancel

existing programs if we are

to meet our targets and we

will need to redirect some

spending to where it is

needed most. I can also tell

you there won't be a lot of new spending given that

outlook in this budget. The Shadow Treasurer Joe Hockey

responded to Mr Swan's speech

this morning, holding a news

conference in Sydney just a

short time ago. In 2008

Wayne Swan warned of a tough budget. 2009

budget. 2009 he warned of a

tough budget. 2010 he warned

of a tough budget. 2011 he's warned of a tough budget.

This year he's warned again

of a tough budget. This is

groundhog day. Wayne Swan

keeps warning of a tough

budget but he never actually

delivers one and what that

does is it leaves Australians confused. Confused about what

the government wants to do

with the economy, and do with the budget. It's not good

enough. What about these

cuts that he's

outlining? Well we will wait

and see. Over previous

budgets Wayne Swan has had

lots of speculation about

budget cuts, last year it was

massive cuts to health and

medical research. This year

Wayne Swan is warning again

of cuts but he doesn't want to speculate. He's usually

the one that delivers all the

leaks to the media, and then when his colleague find out

about the cuts he ends up dumping them. You can't trust Wayne Swan with his word.

Every year he promises a

tough budget, every year the

budget deficit just gets bigger. And Australians pay a

big price for it. There is

one thing that we agree with

the government on, that is it's time to have a budget

surplus. -- The difference

is they will promise it and

never deliver it, Coalition will always deliver a

surplus. What if we do see a

surplus? You won't see a surplus in May. You will see

that the deficit this year is

actually bigger, 18 months

ago it was originally $12

billion deficit, 12 months

ago $22 billion deficit. Six

months ago a $37 billion deficit.

deficit. Now they are

talking of a deficit well over $40 billion in the

current year. In May Wayne

Swan may promise a budget surplus but a year and a

half's time I bet he would not have delivered a budget

surplus. Joining me is

economist and former Gillard

adviser Stephen Koukoulas, thank you for joining us, we

have seen the Treasurer Wayne

Swan try to manage

expectations before every

budget, this time do you think the budget will

actually be as tough as he is

suggesting? Look I think it is. The government seems to

be committed this time to

delivering that surplus in

2012-13 they have partly a

political agenda but also as importantly maybe more

importantly an economic

agenda. What they do want to

achieve is a reduction in the

size of the public sector at

a time when private demand is doing quite well and the other thing that I think is important to remember from

this tightening in fiscal policy and a tight budget that's likely to be delivered

in a few weeks' time, is that

they are pressuring the RBA to cut interest rates, they

are saying if we have got

fiscal policy tight then

monetary policy can move to

an easy stance to allow the

economy to keep growing near

trend or lifting to near

trend. So we are seeing the futures market today in Australia sort of pricing in three rate cuts before the

end of the year. You

mentioned the political goal

of the surplus here, just a

minute ago how have we got to

this point where delivering a

surplus seems to be the

benchmark in this country now

for economic credibility, do

we actually need a surplus

for the economy or is it purely a political

goal? Look, surpluses and deficits, neither side of politics or up until Mr

Hockey just then, neither

side of politics is promising

to deliver a surplus every

single year, the Liberal

Party have promised to

deliver a surplus on average

over the business cycle so

that if the economy does get

hit by a GFC, if the economy

gets hit by a collapse in the

terms of trade or something like that the government of

course must have the

flexibility, be Labor or a

Coalition government, doesn't Coalition government, doesn't

matter, they must have the

flexibility to run a deficit

periodically when the economy

is weak but when the economy

recovers like we are seeing

now and unemployment is

relatively low, we have a

mining boom going on despite

the fall in the terms of trade they are still very high. When we see that

happening they have got a return the budget to surplus and think that's what this

government is trying to do. It is worth recalling that

back in I think it was 2000,

2001 when the economy had a

bit of a slow down, in it the bit of a slow down, in it the

hang over of the tech wreck

in the US, even the Costello

Howard government delivered a

budget deficit. You heard

Joe Hockey in that bit of his

news conference saying that

yes, no doubt the government

will forecast a surplus in

May, but he pointed out

that's very different to

delivering one considering we

won't know for some time

afterwards if it actually

happens. When is that point and is it going to be after

the next election that we can actually see those

numbers? Well, look that's

the critical thing and I am sure the government tacticians are working on

their timing right now, but

the 12, 13 financial year

finishes on 30 June, 2013,

and if the government runs to

full term let's assume it

does we have got an election some time around October,

2013. So in probably the

hustle and bustle of either

the election campaign

directly, or in the lead into the campaign, the campaign, the government

will be announcing, they have

to Australians no the budget

outcome, for 2012-13. My

hunch will be that if they do

not deliver that surplus then

some of the commentary that

you just heard from the

Shadow Treasurer, will just

be absolute political poison

for them so they are going to deliver that surplus come

hell or high water I think.

Which areas do you expect the

government will focus on for

the cuts that Wayne Swan

alluded to this morning?

There has been a suggestion

for example that the

childcare rebate could be

means tested, that's no doubt

the first rumour to fly

around. We have still got a

few weeks yet of speculation

to go. Look, there is lots of

speculation to go. I would be

hazarding a guess there is a

lot of agenda items for

cabinet to consider over the

next few weeks, a lot of

them. Look, I think in a

scenario where the budget

spending is around about $375

billion, they should be able

to find a per cent or so or

two from that spending, a little bit off every department will be not a bad

idea, some of those middle class welfare issues you

touched on, means testing

will be another ash area, the

defence budget has blown out

in the last deck out or so,

now that - decade or so, now we seem to be in a position

to require some money maybe

defence could be targeted for

some trimming as well. Look I

think it will be one of those

ones where they will be

looking for a broad range of

small cut the, and maybe one

or two big ticket items to

really get that extra, I

don't know, $4 billion, $5

billion or $6 billion on the

budget per year. We have

heard a lot about childcare

this week after Tony Abbott

flagged if he becomes Prime

Minister he will get the

Productivity Commission to

look into this idea of subsidising nannies what's your thoughts on the likelihood of the Productivity Commission giving that sort of idea the

thumbs up? Look, there is

both efficiency and equity

grounds when it comes to all of these sort of decisions

that the government and

Productivity Commission must

look at. On efficiency grounds, there is an

important case to try to get

workforce participation

higher. And including female

participation higher and one

of the constraints we keep

hearing about for

particularly female

participation is childcare.

So it is an important issue.

However, some of these policies are very expensive

and some of them are very

inequitable so you are not

getting a peculiarly good

outcome while you might get

some increase in workforce participation it could be the

cost is far greater than the

benefit you could get from

that or it could be the lack

of equity in some of these decisions has got to be considered as well so in a

sense you have got to come

back to some other platform I

think to try to get workforce

participation higher and that

is things like increasing the tax-free threshold to over

$18,000, it is giving the

people who krpt currently aren't in the workforce the

skills and training they need

so when the economy keep growing employers wanting

skilled labour can tap them

and r on the shoulder an get

them back in the workforce,

there is is a complex area,

there are lots of things that

can be done but getting joir

all workforce part is higher

is a critical issue. How

likely is it do you think the

government will be able to

raise as much money as forecast from the mining

tax? My hunch, mining tax is

they are probably going to be

under 14509ing the estimate.

$10.6 billion over the three years I suspect that number

is one of the reasons why

Treasurer Swan has been

downgrading his expectations

of the tax taken, therefore

he's having a little bits of

trouble with the surplus in

2012-13, the reasons are two

fold, one the dollar is high

and that's hurting some of

the company profit estimates

that were made by Treasury

last year, and also we have

seen a bit of a dip in

commodity prices as the

Chinese economy has slowed, there is the global economy

been particularly weak over

the last three or now months

and that's having an impact

on company profits and of

course lower companies mean a

lower take for the MRRT. A

bit early to say exactly how

much it's going to be but I

dare say the $10.6 billion

they were putting in there

mid-year economic update

numbers will be somewhat less

what we see the budget

numbers in May. Stephen

Koukoulas thank you for your

insights we look forward to

chatting to you over the next

few weeks as we start this

speculation on the budget in earnest. Thanks for

that. Absolute pleasure.

Coming up after the break we

will look at this budget

season's first real

announcement with the

indigenous affairs minister Jenny Macklin. That's next. Stay with us.

Welcome back. The drip

feed of announcements in the

lead-up to the budget has

actually already begun. The

indigenous affairs minister,

Jenny Macklin, today

announced more than $1

billion worth of new funding,

for health, welfare and

security services in the Top

End. Sky's Northern Territory

reportser Dan Borsher

travelled to Alice Springs with the announcement where he caught up with the

minister, he began by asking

if the budget squeeze was

having an effect on

indigenous programs. I

think this does demonstrate

two things, one is our determination to get the budget right in these

economic conditions, it is

critical that we do come back

to surplus and I understand

that absolutely but the

Treasurer, and I are also

determined to make sure that

as a Labor government we

deliver to the most

vulnerable in our community. And of course Aboriginal

people here in the Northern Territory are very much in

need of the services that we

are announcing funding for

today. Whether it's the

family support services, the

youth in communities, the

additional support for young people, we know how important

it is that we have the health

services both for children

and other Aboriginal people here in the Northern

Territory, and the critical

role of community safety and

support for outstations. So

all of that we have

announced, we are determined

to provide the security that

people need here in the

Northern Territory for the services this are so

important. What do these

announcements of almost $1.8

billion over 10 years mean

for the Northern Territory?

Well, first and foremost

they are about delivering the services that Aboriginal

people themselves have said

to me that are so important

for them. So if we start with

the announcements that we

have made today, the health

services, that are so

critical, whether it's making

sure that kids are getting

their ears check $, so that

they can learn at -- checked

so they can learn at school,

getting their eyes and teeth

checked, whether it is making

sure we have the full range

of alcohol rehabilitation and

treatment services available

for people, as they deal with

their alcohol addictions or if we go to the mental health

services, very much in the

news over the last couple of

days how critical it is that we have additional mental

health services here in the

Northern Territory, but that

we also provide the support

for young people. And so we

have announced additional

support for youth in

communities that will now

extend over 10 years, we will provide additional funding

for communities for children

so that little children, like

the place we are right now,

get the support and guidance

that they need. In 10 years

time when this funding will

be coming to its end, what's your vision for indigenous

Territorians? It is really

the vision that Aboriginal

people have themselves that

they are able to see they are able to see their

children, grow up happy and healthy, that their children

get a great education, but

they have got access to the

health services that they

need. That they get the

family support that they

need. That they live in a

safe place. That they are not subjected to the violence

that comes from alcohol

abuse. Where people aren't

addicted to alcohol and don't

see the terrible trauma that

comes from that alcohol

abuse. We can all work

together to make sure that

these changes come about but

we have listened long and

hard to Aboriginal people.

This is their aspirations,

and we want to help them reach those aspirations. There have been

some reports from communities

across the Northern Territory

that Judge people didn't feel

like they were list -- that indigenous people didn't feel

like they were listened to

during the consultations how

do you respond to that? I think there will always be people who don't necessarily

agree but I think you can

hear from the announcements

we have made they are about

the services that are so very

much needed here in the Northern Territory. Yesterday

I was out at a small place,

just near Campbell Newman

called Bi -- just near

Catherine called Binjari, the

top two issues for them were

about alcohol. They see the

death and destruction that is

coming from alcohol abuse.

And then we went to an

Aboriginal medical service in

Catherine and also gave them

some extra money for harm

minimisation. To deal with

the foetal alcohol syndrome

that comes from pregnant mums

drinking while they are

pregnant with their babies.

We know how critical it is to

work with Aboriginal people

to deal with these problems,

we also know how critical it is that the government

provide the money that is so

desperately needed for this

full range of services.

Community safety, support in

outstations and homelands,

health services, services to

deal with alcohol, community and family support, that's

what we are doing and we are

very pleased to be able

to. Minister yesterday you

announced more than $200

million for home lands and

outstations what does this

mean for unlike Mutujulu who

still has to sign a land

lease? We have some housing

money available to spend to

refurbish houses in Mutujulu,

think it is around $1.7

million. We are still

discussing a housing

management agreement with

them, I hope that that will

be able to be agreed pretty

soon so they with get on with

that. -- that we can get on

with that. There are other

issues we need to work with

with the people of Mutujulu

and of course that will be done with them and with the Northern Territory government

and shires. What are those issues that you still have to

work through? The municipal

service delivery for example,

obviously that's just one of

them. Is it also around land

tenure? There are issues

because we have got the

national park nearby, so all

of that will continue to be

worked on. And have you

visited that community? I

haven't yet. There are

hundreds of communities in the Northern Territory, I have been to many but not yet

to Mutujulu. Just finally,

you have made now three major funding announcements from

this year's forthcoming

budget, will we see any more here in the Northern Territory for indigenous affairs? Well, of course we

are still in the middle of

the budget process, it is

very important that we work

through these issues so I am

very pleased that we have been able to make these

announcement s, one of the

reasons for making them early

is that a lot of the funding

for these services was due to

end in June this year. We

wanted to make sure that the

people who are in these very

important jobs, whether they

are youth workers, whether

they are police officers,

night parole workers, health

-- night patrol workers

health professionals we want

to give them certainty and

security they can stay in the jobs and also know the funding funding is there for 10

years, it's the first time we have seen that sort of

commitment over a long period

of time, very, very important

commitment from our federal

Labor government. Thank you

very much for your

time. Thank you. Now

before we go I just want to

play you a short bit of a

feed of Tony Abbott we have just received in Sky News.

Some of you may recall

comments made by Germaine

Greer last week in which she suggested the Prime Minister

should change the clothes she

wears to suit her body type.

That's the polite way of

putting it. Coming with

someone from her feminist

credentials the comments

certainly did raise some

eyebrow s, today Mr Abbott is

to be filmed agreeing with

her. Here is what he said. I

know. Germaine Greer was

right on that subject. The

microphones are always on, I

will leave you to judge if

that's an appropriate comment

from the Opposition Leader.

That's all we have for PM

Agenda, make sure you join

David Speers on the nais this

evening at 8 p.m. eastern

daylight time. Of course

Kieran Gilbert will be back

tomorrow morning with 'AM

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