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Australian Agenda -

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Good afternoon. Welcome to

the program. As Parliament

wraps up for this budget

week, the focus of the two

sides of politics this

afternoon in question time

tells us much about their

strategies. On the one side

of the house, Labor devoted

its time to the economy, trumpeting today's fall in

unemployment, below the 5%

barrier to 4.9 and challenging Tony Abbott to

spell out in his budget reply

tonight how he will pay for

all his promised. On the

other side of the house, the

Coalition went for Craig

Thomson. Seizing on the fact

the MP only declared on the parliamentary register last

night that his legal bills

were paid by the Labor Party.

And demanding the Prime

Minister explain what role

her office played in the

arrangement to ensure that

Craig Thomson wasn't declared

bankrupt and then kicked out

of Parliament. Coming up we

will go through the day's developments, what can we

expect in tonight's budget

reply and what risk is there

of the Government falling over the Craig Thomson affair. It certain is

looking more likely. The

independents have hardened their position this week. We

will be talking to the nationals senator, Barnaby

Joyce, and also Finance

Minister Penny Wong, also

joined by a panel of senior journalists this afternoon.

First, a check of the top

stories this hour. Thanks.

The budget focus turns to the opposition tonight as Tony Abbott prepares to deliver

his reply speech. He will

focus on growing the economy

but the Government says first

he must explain why he

opposed the school kids

bonus. To help illustrate

her budget cash hand-outs,

the Prime Minister invited TV

cameras to morning tea. I'm

on TV. You never know, you

might be on TV too. I'm not

on TV. It's humans in Labor's heart land with whom

the PM is hoping to reconnect by declaring open war fair on

the rich. We are the Labor

Party and we make absolutely

no apologise for saying we

are here to serve low and

middle income Australians and

Mr Abbott is here to serve

the rich. That's what we saw

from this Government this

week, with its class war

budget. The opposition tried

to block the school kids bonus from going through

Parliament. Arguing a sugar

hit to the economy isn't

what's needed. Tonight, Tony

Abbott will use his budget

reply speech to explain his

economic vision. Obviously,

we need to make savings. But

the best way to ensure that

it is possible to have a strong Australia going into

the future, is to have

economic growth. When he becomes Prime Minister, he

will be knocking on that door

to grab that families payment

back to give it to Clive and

to give it to Gina. The

mining boom is largely credited with Australia's

unemployment rate, taking

forecasters by surprise, with

a substantial drop sending

the dropless rate under 5%

again. On balance, the

Government believes this is

good news. Tony Abbott's

budget reply will focus on

his own heart land of small

business and focus on

strategies for improving growth. But the Government

is demanding a much more

detailed explanation of how

he will pay for it. Given

the $70 billion crater in the

Liberal Party's budget bottom

line, people like Mr Cost

tello now are simply wringing

their hands at the wreckage.

Peter Costello has denied

reports he wants to return to

Canberra and sought to

convince rising star Josh to

stand aside in the seat of

contributor to this Koyonng. He was a tremendous

Parliament, I miss him from

the Parliament, it was just a

bit of political skutle butt

and it has been denied.

Liberal Party MPs are blaming

my krel Kroger for whipping

up the story. He has denied

the latest theories and you

know what, I believe him. It

is not just the Government

facing distractions on budget

week. And, of course, Sky

News will have live coverage tonight of Tony Abbott's

official reply to budget

2012. The Opposition

Leader's speech is due to

start at 7.30 eastern. We

will have full analysis and

watch the Nation with David

Speers tonight from 7.30.

Two Sydney teenagers with

alleged bikie links have

pleaded not guilty in court

today over a string of

shootings in the city's west.

Police burst into a home at

awe burn arresting a

17-year-old boy. He is

charged with organised crime and firearm offences.

Another 17-year-old was arrested after officers

searched a home in Granville.

They are both alleged to have

shot as a block of yubts on

saip 23. There have been a

number of ongoing

Force Kinnarra including investigations by Strike

forensic evidence and that

has led us to the two 17 year

olds who have subsequently

been charged. They did not

apply for bail which was

formally refused. Two Hells

Angels associates have

already appeared in court

over the incident. The

Federal Government will

fast-track unpaid

entitlements to CMI

Industrial. Aion young

reports from the offices. There's finally some good

news for dozens of workers

who lost their jobs last

week, they were locked out

for several days and the

union says finally there is

an agreement for them.

Potential liquidation of this

company won't happen for at

least a few weeks, our

members need the money now,

outcome yesterday in we are pleased with the

Canberra. I have reported

that back to our members here

at the site and our members

are really happy with the

outcome. The workers here at

CMI found out their company

was in trouble before

Christmas, the owner owes

around $150,000 in rent to

the landlord. Because of

that, the workers were shut

out here and that just in time policy throughout the

car industry meant that the

suspension parts of the

company CMI makes for Forward weren't arriving for the production line and therefore

it was shut for several days, 1800 workers were affected

there. But it certain comes

at a difficult time for the

company and the entire car

industry with Ford yesterday

announcing the biggest ever

loss, $290 million, and this

is what the union says will

happen next. We will be seeking meetings and they

will explain their situation

and we will work through the

process. And for the unions

and the workers it couldn't

have come at a worse time,

that announcement, they are

about to begin their

enterprise bargaining

negotiations. Optus says it

will appeal to the High Court

over a Federal Court ruling

which ended its TV now

service for its mobile phone

customers. Telco says it wants the high school court

to overturn the ruling from

watching recorded free-to-air

programs on their devices.

The NRL, AFL and Telstra

joined. Telstra played $153

million for the exclusive

rights to stream AFL matches

for the next five seasons.

US President Barack Obama has

put his support behind gay

marriage an issue that is

certain to become more

prominent in this year's race

for the White House but the republican candidate Mitt

Romney swiftly disagreed with

it. It was big enough for a

network news flash. And

these are hugely significant

words from an American

President. At a certain

point I have just concluded

that for me personally it is

important for me to go ahead

and affirm that I think

same-sex couples should be

able to get married. A haste illy addressed interview he

has always tried to avoid

unless it was for laughs. In my first term, we appealed

the policy, don't ask, don't

tell. Wait though. In my

second term, we will replace

it with a policy known as

it's raining men. But when

voters in North Carolina

outlawed same-sex marriage

this week, the 30th State to

do so, the pressure on Obama increased. And in places

like Washington DC, one of a handful where gay marriage is

legal, those about to take

advantage believe this is a

historic moment. Over time

our country has evolved from

days of slavery to

segregation, to we have an African American President. One day I believe we will

have a gay President, a

female President, so it is

just baby steps and those

steps can be frustrating

sometimes, but they happen.

In election year, the

question of why now Obama's

opponents say is an easy one

to answer. He is trying to

create a distraction. He

doesn't want people focussed

on the economic collapse that is around him, he doesn't

want them considering the

implications of that economic

collapse. And it is almost

like saying look over here,

while he takes the food from

the kids' plates. If it is a

political calculation on this

issue at least, the gap

between Obama and his likely opponent couldn't be wider. I have the same view on

marriage that I had when I

was governor and that I've

expressed many times. I believe marriage is

relationship between a man

and a woman. But Americans

are becoming less opposed to gay marriage. And while some

of Obama's biggest fans will

never support it, offering

that old election favourite

of hope to others, makes it

worth the risk. Advocates of

same-sex marriage in

Australia hope it will put

pressure on our national

leaders. Australian marriage

equality campaign director

has told Sky News President

barm's announcement has given

his cause more momentum --

President Obama has begin his

cause more momentum. Support

for this issue is lower than

it is in Australia, if he can

support marriage equality, why on earth can't Julia Gillard and Tony Abbott? At

the very least, we ask of Tony Abbott allow a conscious

vote on this issue so those

conservatives in your rank

who support this issue can

vote for it. But the Prime

Minister says she remains

opposed to gay marriage shrugging off President

Obama's change of heart on

the issue. No, I've made my

mind up and my position on

this is well-known. The AFL

has changed its position on

sliding in the sport. Free

kicks will now be awarded

against players who slide

into contests. Free kick is

the immediate action that

will apply as of this weekend

and we are considering very closely whether to amend also

tribunal rules and

guidelines. In the meantime,

GWS coach Kevin Sheedy has

said that he hopes Gary

Ablett will feature for the Sunz when they feature this

weekend. I on the great player should play,

particularly when we are in

Canberra, a crowd would come

along and watch a game like

that. He is the best player

in the AFL. He has also

endorse the a State of Origin

to return to the AFL. Now to the weather forecast for

tomorrow. Cool, windy and

wet in the south-east and a

warm day in the west. Back to David Speers and PM

Agenda. Thank you. After

the break on PM Agenda, we

are going to look at, well, what's been another

interesting day in pom ticks,

as this budget weeks draws to a close. The Government

trying to sell its budget and

put pressure on Tony Abbott.

But that ghost of Craig

Thomson is still lingering

around the Parliament and

this Government. The

opposition again trying to

hang him around the neck of Julia Gillard in particular

focussing on the fact that

his legal bills were paid up

until a couple of weeks ago

by the NSW ALP and demanding

to know what Julia Gillard's

office knew about it or were

perhaps involved in arranging

that deal to cover his legal

bills and prevent him being

declared bankrupt and kicked out of Parliament. We will

be looking at all of that.

Our guests this afternoon,

the national's Barnaby Joyce

will also talk later to Penny

Wong and our panel. Stay with us.

Good afternoon. Welcome to

the program. MPs will be

heading home to their

electorates tonight as budget

week draws to a close. It's

been a week in which the

Government has, well, got a

little bit of wind in its

sales in terms of the way its budget has gone down,

families receiving a big bonus payments as a result of

Tuesday night's announcements and the Government able to

put a bit of pressure on Tony

Abbott to explain why he has

voted against these measures

which have now gone through

both Houses of Parliament,

went through the Senate this afternoon, to give parents

what's called a school kids

bonus, putting pressure on

Tony Abbott too over his budget reply tonight to spell

out how he is going to pay

for everything and relishing

in some good jobless figures,

it fell to 4.9%. But that's

where the good news has ended

for the Government. The

Craig Thomson affair lingers,

despite his disassociation from the Labor Party. He has been suspended from the

party, now sitting on the

cross-bench. The fact is he has continued to be a trouble

spot for Labor who have

continued to have to vote to

protect him during this week.

Today, it was the revelation

that Craig Thomson only

declared on the parliamentary

register last night that he had been receiving assistance from the Labor Party to cover

his legal bills, so he

wouldn't be declared

bankrupt, and then kicked out

of Parliament as a result pf

the opposition today

demanding to know exactly

what Julia Gillard and her

office knew about this or

were involved in arranging

that deal. Let's take you

through the events of today.

Firstly, the Government in

question time this afternoon

putting all sorts of pressure

on the Opposition Leader

ahead of his budget reply

tonight. When he walks into

this chamber tonight, he

should say whether he is

supporting the proposals to spread the benefits of the

boom and how he is going to

pay for it. Tonight, we will

hear how the leader of the opposition is going to

justify giving billions of

dollars to Gina Rinehart and

Clive Palmer. While he says

no to families. Never has a

leader of the opposition been

more out of touch with the struggles of working families

than the leader of the

opposition sitting here. The

other thing the Government

was keen to focus on was the unemployment rate today. As

we mentioned, that fell to

4.9%, surprising economists

who had been expecting

basically a pretty steady

sort of figure from 5.2 down

to 4.9 did surprise many.

More than 15,000 jobs were

created in the month. So

that has seen a further dip

in the unemployment rate as

the Prime Minister was keen

to tell everyone. I am

delighted that today's

unemployment rate has fallen

to 4.9% in April, an achievement for the

Australian nation so soon

after the global financial

crisis, we should all be

proud of. But, Craig Thomson

was still there hanging over

the Parliament and the

opposition didn't take long

to shift their focus in

question time to this issue.

In particular, demanding to know what the Prime Minister

or her office knew about the

fact that his legal bills

were being paid up until the

point he left the party a

couple of weeks ago, were

being paid by the NSW branch of the Labor Party. Now, we

knew this was the case. The

story broke on this back in

September of last year. But he hadn't updated the

parliamentary register that

he was still having his legal

bills paid for, only did that

last night when journalists started asking questions. Today, the question was what

did you, or your office, know about this and what possible

involvement was there in

arranging this legal bills to

be paid for Craig. Here was

Julia Gillard's

answer. These are matters

for the matter of Dobell and the NSW branch of the Labor

Party played no part in this

matter and I am not

responsible for this matter.

My staff are not responsible

for this matter. The department of Prime Minister and cabinet is not

responsible for this matter

either. The answers the

Prime Minister gave in

question time today could

only be described as

evasionive and tricky. The

Prime Minister must explain

every aspect of the Labor

Party's deal with the Member

for Dobell because without

the deal, she would not be

Prime Minister. The

opposition moved a motion in

Parliament on this matter but the Independents, at least

Rob Oakeshott and Tony

Windsor, stuck with the

Government for the second day

in the row. No doubt hardening their position in relation to Craig. They don't like what they have read in this Fair Work Australia report that came

out on budget eve, on Monday

night. Craig Thomson is

going to give a statement to

Parliament when it next sits,

a week after next. And both

Rob Oakeshott and Tony

Windsor have made clear that

they are interested to hear

what he has to say to

Parliament about this whole

matter and have a listen in

particular to what Rob

Oakeshott said on this

today. Pardon, the French,

but bugger the numbers. We

have got a deal with what's

in front of us and what's in

front of us is a comprehensive damning

report. Anything can happen.

I don't want to get too far - I haven't heard what he has

got to say, he will be

talking to the Australian people as well as the Parliament. Anything can

happen, bugger the numbers.

Well, if they do vote with

the opposition after Craig Thomson is presumably given

his statement, if they do

vote to suspend him from

Parliament for two weeks, and

this is the suggestion going

around, well, could the

Government then fall in that

period if a no confidence

motion is moved? A lot would

hinge on where Andrew Wilkie

would go. They wouldn't have

Craig's vote, the Government,

so the risk of them falling

would be of course much, much

greater. These are going to

be interesting weeks ahead

indeed and a lot of pressure

on those Independents no

doubt as well. We will be

talking to the Finance

Minister Penny Wong, first

Barnaby Joyce joins me from

Canberra. I want to start on

the Craig Thomson matter. If

he does get up in Parliament

in a couple of weeks and

simply says, look, all these findings and the Fair Work

Australia report are wrong,

I'm innocent, I didn't do any

of this stuff, he hasn't been

charged or convicted with anything, what should happen then? Should Parliament

really be the judge and

jury? Well, the issue is has

he gone - has he mits led the Parliament in any way, has he

said things that are not

correct, has he been - has

his actions be covered up by other people, have things that should have come to like, just like the

declaration of who is paying

his legal fees has not been

declared, the issue is also

the moral issue, not so much

of what he did, that is

between him and his wife and

his God, but the fact he did

it with somebody else's

money, the fact that he did

it with a lady who has to

scrub the floors of a

hospital, clean the sheets in

a hospital. Those people

deserve the respect that

their Parliament would show

people to them who understand

the worth of their work and you don't understand the

worth of someone's work by

taking their money to the

brothel and spending it

yourself. How do you know

that has happened? Is the Fair Work Australia report evidence itself or do you

have to wait for a court

process? Where do you stand

on that? Look, we either

believe what we read in the

Fair Work Australia report,

which they were pretty

conclusive that the money

that he spent at these

prostitute parlours and - the

other story, if you believe

there is another story, is

just completely unbelievable,

it works on the premise that

someone broke into his house,

stole his keys, his wallet

and his mobile phone, drove

down to Sydney, obviously

they were bored because they

kept on ringing up his

friends, they must have got

on the phone, participated in

a transaction where they had

to present themselves and the

thief looks just like Craig

Thomson, the same licence, had a signature just like

Craig Thomson, drove back up

to the central coast ringing

up the friends again and then

broke back in the house, put

everything where they found

it. That is the other story

if you want it and I have

heard the Independents talk.

I don't quite know what more

we need, maybe we could open

up a brothel in Parliament

House, that might do the

trick, but apart from that,

it is pretty sorted. Just to

be clear then, you're saying

you don't need to wait for a

conviction in the courts to

actually make a judgment on

Craig Thomson? Well, you

certainly need a conviction

to say that Craig Thomson is

a criminal. I'm not alleging

he is a criminal. I'm

alleging that what he has

done is he has spent other

peoples' money as the Fair

Work Australia reports

clearly shows on things that

were of no benefit to the

union members who have every

right to expect that their

money would have been spent

on the betterment of their

lives, not on prostaouts and

cash advances. That should

mean that he can't sit in Parliament is what you're

saying? It is just so

absurd. Why are we having

this discussion. It would stand to reason that those

people would have an expectation that their rights

at work would be protected by

someone saying, look, I'm not

going to use your union fees

to look after your future,

I'm going to use your union

fees to look after my night

and here my night comes and

it's going to be a big one.

This is not good. That money

should be handed back to the

people from where it came so

that they can spend it on

their kids' teeth or taking a

holiday or painting a room or

paying the insurance or

paying the rates or paying

some of the power bills that

are going to go through the

roof because of the carbon

tax. Let's talk about that.

The school kids bonus, one of

the key elements of the budget went through the Senate this afternoon, the

opposition have voted against

it. Surely there must be

families in your neck of the woods, in south-west

Queensland, who like to get

their hands on a $410 or $820 payment? Look, there are

people at the pub on Friday

night and everywhere who

would like to get their hands

on money. So would I. If

someone is throwing money around, everyone is going to

grab it, doesn't make it

right. Where was the

committee that suggested we

should do it this? Where

were the industry bodies who

had letters in the paper

suggesting we should do this?

Where did this inspir rairgs

come from? Where did it come

from? The back to school

bonus is more like the

country on the skids bogus.

What is it all about? Where

did this inspiration come

from? Why don't we wait around for tomorrow until we

have a different bonus.

Everyone will collect that

money as well. It is

ludicrous and what is bad

about it is that it is

borrowed money, money we

don't have. It goes towards

the $300 billion overdraft

limit that we have got pay

off and for the kids, what

they get to do is spend the

rest of their lives trying to

pay off the Labor Party debt

and their kids and their

grand kids the way we are

going, and I'm deadly serious

about that because if they

have got a $1.5 billion

surplus and they borrowed an

extra $200 billion plus since

they have been in Government,

we will be waiting 150 years

before they get back to the level. Isn't that argument

that you have made there an argument against any

Government hand-out that

doesn't have strings

attached, like the increase

in the family payments that

they are supporting, or the

baby bonus or other things

that are handed out by governments? Other things

have been debate ed, this is

something that has come

straight out of left field.

There is no logic behind it.

Everyone is fascinated by

what this means and the only

semblance of an excuse we can get is that this is so that

people don't have to keep the

receipts that they would otherwise have kept and

claimed back at the end of

the year. That is a pathetic

excuse. Let's call this for

what it is, they are

panicking, chaos, with

Thomson, Slipper and Rudd,

that is the chaos in the

back, the big chaos, they

have given up on this

Government, so they think

maybe if we pay them enough

money with a wink and a nod,

they will forget about us and

vote for us. They will certainly take the money but

not forget about you and I doubt very much they will

vote for you. Finally Tony Abbott's budget reply

tonight. What do you think

he needs to do? The

Government is saying he needs

to spell out how he will pay

for everything and there are

holes there in terms of

making it all add up without

the mining tax, carbon tax

and still promising all these

things. Does he need to

spell that out tonight? We are the opposition, they are

the Government. We are not

here to explain their

problems. They have created

the financial mess that the

nation is currently in. I'm

sure Tony will ask the question about why have we

got this extension on this

overdraft required now? What

is all this about? If they

have got this net debt

position, this magic number, magic money somewhere stuffed

up a log, then why are we

extending the debt? And may

I remind you listeners, that

this overdraft which is now

yours, your listeners have to

pay for it, $300 billion, they will hock it up, they

always do, well, if they say

as they do, as Penny Wong has

said today, that they intend

for the limit to go - they

intend for the limit to go

back to $250 billion, then there is already the capacity

in - with allowance at the

moment, to have temporary extensions during the cycle

so that you don't need this permanent extension of the

limit. As long as by the end

of the financial year you're

back down below $250 billion,

and minister wong, the

Finance Minister, says that

is going to happen, so why

are we doing this unless they

have got no confidence whatsoever in their own

numbers. We will be talking

to Penny Wong a little later

in the program, so we will

put that to her. Thank you for joining us this

afternoon. After the break,

we will be talking to our

panel about, well, the

wash-up of budget week but

also the precare youls hold

on power the Government has and whether Craig Thomson

could yet bring them down. Stay with us.

You're watching PM Agenda.

Welcome back. In a moment,

our panel, first a quick

check of the news headlines.

Australia's jobless rate

has unexpectedly dropped to

4.9%. The drop in the unemployment rate represents

an extra 15,500 people

joining the workforce.

Analysts had forecast a total

employment to fall in April

but did not anticipate as big

a decline. The fall in the

number of people looking for

work was good news for our

market with the Australian

dollar responding strongly

after it fell close to parity

with the US dollar overnight.

Julia Gillard and Wayne Swan

have hit out at the colation

claiming that it has poor economic credentials. They

made the comments as Tony

Abbott prepares to make his budget reply speech. Mr

Abbott says he will outline to the Australian people that

they will be better off under

the Coalition and how if elected he will grow the

economy. And improve the

well fair of working families

and small business. But

Julia Gillard says the

Opposition Leader lacks an understanding of basic economic management. Police

investigating Sydney's recent

spate of gun crime have

arrested two teenagers with alleged links to the Hells

Angels bikie gang. The

teenagers both aged 17

appeared in a Sydney court

after they were charged in

connection to a shooting in

the city's west last month. The pair pleaded not guilty and although they did not

apply for bail, the magistrate formally refused

any bail application. The

pair will next appear in Parramatta Childrens Court.

11 people have now been

arrested as part of Strike Force Kinnarra which was established last month to

investigate Sydney's spate of

gun crime. US President Barack Obama has become the

first sitting President to

declare his support for gay

marriage. However, the

President says a decision on

whether to legalise gay

marriage should be left to

individual American States. Republican presidential candidate Mitt Romney was quick to disagree with Mr Obama's position. Prime Minister Julia Gillard says

she remains opposed to gay

marriage. In sports news Parramatta coach Stephen

Kearney has backed his team to break their form starting with the Raiders this

weekend. It has been a tough

week after facing a

frustrated Parramatta fans at

the AGM earlier this week but

he is confident he is the man

to lead the Eels. Now, the

weather for cast, cool, windy

wet in the south-east, and

wet in the west. Thank you.

Let's go to our panel joining

us from Canberra. Thank you

both for joining us. I want to start with Craig Thomson

before we get to the budget

and tonight's budget reply.

Now, today we learnt that he only just updated the parliamentary register on the

fact that he was receiving

financial assistance from the

Labor Party to cover his

legal bills. We have known

for a while that that was the

case but he was late in

updating the register. And the questions then went to

the Prime Minister what did

you know, what did your

office know about all of

this, and she wasn't exactly

ruling out the potential

involvement of any of her

staff in her office on this

question. But Malcolm to

you, the key here is when

Craig Thomson, the week after

next, gives his explanation

to Parliament and if the cross-bench isn't satisfied

with it, what is going to

happen then? Are we at risk

of seeing the Government fall

over this whole issue? Look,

it wob a major step,

unprecedented, for the

Parliament to suspend

somebody on grounds to which

they have not been convicted.

It would be an extraordinary

step. Normally, the basis of

parliamentary representation

is that the electors get rid

of the MP they don't like,

they do that at regular

elections. To toss out

somebody for things that

might or might not have been

done, without a court or any

other official tribunal

evaluating those allegations,

would be a huge step... But

that's the point then. I'm

not sure all the

cross-benchers would be

prepared to take it. Any

sort of tribunal, as Julie

Bishop was pointing out

today, it was a quazy

judicial body, they have made findings after an extensive investigation. Yes, it is

not a court conviction, but

it is a little more than an

accusation. Well, these are

all civil charges that will

be heard by the Federal Court

and it toss do with keeping

records properly and, as we

have seen again, with Mr Thomson's updating of his personal declaration, he is

not too hot on the paperwork

stuff and he hasn't been for

the last nearly 10 years. So

if somebody is going to get chucked out of Parliament,

even suspended for two weeks

simply for not keeping

paperwork up-to-date or

breaching civil regulations,

that as well would be a huge

step. Peter, Malcolm there

making the point quite

rightly that it is unprecedented for someone to

be kicked out if they are not

convicted of something under

these circumstances, but clearly, the case being built

against Craig Thomson is that

what he has done here is

morally rep hengesible. What

do you think, any chance of

seeing the Government fall

over this? There is the

question of principle and

then there is the question of

pragmatic politics. This is

ugly but I don't think it is

fatal for the Government. It

is ugly on any analysis on

any day. The news headlines

you just showed us have a

police raid in Sydney. You

need to keep a close track of

the news to work out whether

it is another raid on the HSU

or the Hells Angels. You

have a Prime Minister today

defending her policy, a

prescriptive policy on sexual

morality on gay marriage, and

yet with an apparently les

affair approach to the sexual

morality of Members of

Parliament. Do you think

that, do you think Julia Gillard is actually being a

bit weak on this issue of

sexual morality? Well, in terms of Members of

Parliament, you know, she

defended Thomson, in fact,

both parties pre-selected and

endorsed both these men, the

two major parties have known

the histories of these men

and the accusations against

them and reendorsed them

anyway. So the question

about the tolerance and the

morality of the leaders and

the parties and the

structures and the

pre-selections, is clearly

there. But this is ugly. It

is not criminal. That is

Malcolms point. I think the cross-benchers, you will

find, well, first step Craig

Thomson will maintain his

innocence. I think he will also ask what is the case to

answer here, there are no

criminal charges. There is

not a criminal conviction.

Much lesser charge. And I

think that Rob Oakeshott and Tony Windsor will be most

reluctant to bring down a

Government on whose survival

they depend over what is

effectively a question of

political sentiment and ugly

politics rather than crime

and rather than any real hard

evidence. But Malcolm, we have heard and Barnaby Joyce

gave it to us then, we heard Chris Pyne making his ka day

in, day out as well, the case they will mount against Craig

Thomson, if and when they do

move any sort of motion to

suspend him from Parliament,

will go to the misuse of

hardworking union members funds, people who do clean

bed pans day in, day out, in

nursing homes and hospitals,

their union money being used for prostitutes and lavish dinners and the rest of it,

the case is going to be a

powerful one. Would those

independents be signing their

own suicide notes if they

stuck by the Government and

didn't support any sort of

suspension? Well, Rob

Oakeshott today said bugger

the numbers, he is going to

vote for some sort of centre

of Mr Thomson. If he does

that and reduces the numbers,

he may as well go straight

from the chamber to the

office and pack his bags an

wave goodbye because he will

not be coming back. So that

thought also will be in his

mind I think. Let's get to

the budget then. What could

you think this week, as it

wraps up, MPs heading home

tonight? Has it been a better week for the

Government being able to

focus on its heart land and

the money going to

hardworking families

pockets? Well, it's good for

the Government because they

are able to show a plausible

pathway to the long promised

surplus, so they are able to

say on this economic

credential "We are keeping

our promise to the Australian

electorate" but they are also

doing it in a way that allows

them to claim economic

credibility. And the fiscal consolidation in there is

big. It is serious. And

they get, I think, full

credit for that. The second

part of it, the populous cash

hand-outs, gives their MPs

something to go to their electorates and argue about

and fight with. So in that

sense it's a budget that

gives them a basic economic credential and a fighting

weapon, if you like, in

electoral terms. The

problem, or the I guess the

knackering of this budget, is

the subject we have just been

talking about. That's right.

Knackering indeed. They

cannot talk about their

serious agenda of policy and

electioneering when they are

constantly on the defensive

over Craig Thomson and Peter

Slipper. What about Tony

Abbott? The fact that he

voted against that school

kids bonus, it has now gone through without him, but the

fact that they drew a line on

that one and the fact that he

still has an issue in making

all these numbers add up,

what does he need to do tonight, do you think? I

think the problem that he is facing is that the whole

debate over the mining tax

and disbursing the benefits

of the mining boom have now

been reduced to a

conversation that can be had

at the school gates as mums

and dads wait for their kids

to come out. When I say

"reduced", I don't mean that

it has been simplified out of

proportion for these people

but it has been made more

understandable for the lay

man and woman and they will

be thinking well, what has

the Liberal Party got against

us getting a few quid out of

these billions that are

floating around courtesy of

the mining boom? They are

not delivering all that money

here where I live. Secondly,

he has got to present

tonight, one would argue, a

projection of opposition

handling of funds that

wouldn't leave anything in

doubt. The main thing that

he has to cover is the

suggestion that there is

something like $70 billion

worth of funding that he is

going to have to find, most

of that being in commitments

he has agreed to without

saying where the money is

coming from. So he has got

to be able to convince the voters that he knows

perfectly well where he is

going to get that money. He

doesn't have outline an

alternative budget. He has

to instil some confidence

that he knows what he is doing. Peter Costello won't

be returning to Parliament.

He says this story was just

kicked around by some miss

achieve makers. Would it

have been a good idea for him

to come back? I would have

loved it. I think all of us would have thought it was

terrific for him to come back

on so many levels. And not

just the mischief of

journalists wanting things to

cover but he came out and

knocked it on the head and

looking back on it, it does

seem a pretty silly proposal

but it does indicate there is

something going on within the Victorian Liberal Party that

is not good news for Tony

Abbott and the Feds

generally. That is the

point. Whether this was a serious proposition or not, the fact that people have

been chattering about it.

David, in a sense Peter

Costello has never left the Parliament. The Liberal

Party today keeps trading on

the economic credibility that

inherent in the Liberal

personality. He was the

embodiment of that. And he

and Howard's gosts still

inhabit the Parliament.

Abbott reminds the public at

every opportunity that there

are 16 former members of the

Howard Government in his Government. Proposed

Government. He is seeking to

keep the ghost alive. So in

that sense he has never left

and if they can hang on to

that, that's a good thing for

them. They lack a credible,

fiscal and economic policy at

the moment. Tony Abbott

needs to find one. It is a core priority for this party. We will see what we

get tonight in the budget

reply live from 7.30. We

will be bringing that to you.

Thanks for joining us. Pleasure. After the break, the Finance Minister Penny

Wong no doubt she will have

some advice for Tony Abbott

ahead of tonight's budget

reply. But we will also have

a look at some of the

Government's own budget

figures. Stay with us.

Well, right about now, Tony

Abbott is probably rehearsing his budget reply speech which

he will deliver in Parliament

in two and a half hours from

now. Just a little over

then. It is 7.30 eastern

time, you can watch it live here on Sky News. The

Government has spent today

saying what he should do and

that is spell out where the

money is coming from and why

he is not supported that

school kids bonus to help struggling families with the

cost of living pressures,

says the Government. But one

thing Tony Abbott is likely

to do in his budget tonight, budget reply speech tonight,

is tear into the Government's

budget for being full of

fudges and fiddles, pulling

money forward and back, to

deliver what he calls a

phoney surplus. Well, to

look at the budget and the

budget reply tonight, I'm

joined now by the Finance

Minister Penny Wong. Thanks

for your time. Good to be

with you. Let's look at this

claim from the opposition of

fudges and fiddles. I want

to go to a couple of things

in the budget that stand out in particular. This cash

that's listed in the budget

from dividends and other, $16

billion this year, then they

suddenly jump up $5 billion

next year, and then fall away

the following year. Next

year, of course, is when

you've forecast a surplus to

return. Why is there that

jump in the cash that's being

received from dividends and

other for that one year? Well, the payment of

dividends is not unknown in

the federal budget David and

sometimes they are not always

at the same level. I'm not

sure what else you're

including in the question

you've just asked, whether

there is also things that

might be in the contingency reserve for the usual reason.

But the best way to look at

what is happening in the

bublget is to look at both

the tax to GDP and the

payment to GDP ratio because

what that shows you is that

the Government's size in the economy and whether or not

the Government is in fact doing what it said and we

are. We are taxing less than Peter Costello did in the period just before we came to Government and we are

spending less. In fact, over

the forward estimates, if you

look at where payments are as

a share of the economy, they

are at levels that we haven't

seen for any sustained period

since the 1980s. This issue of shuffling money

around... But my point is

David you can't achieve that

kind of payment to GDP ratio

by shuffling. You have to

actually make decisions such

as we have made to take $34

billion of savings on top of

the savings we have already

taken. ... But are you

denying there are shufels

there. $1 billion in local

Government grants brought

forward a year so they don't

hit the budget bottom line

next year. I'm very happy to

talk about that. We have had

the practice for a number of

years #2340u, prior to this

budget, of bringing forward a

quarter of those payments.

This year, because of the natural disasters that had

occurred and the need for

more local infrastructure,

the repair of roads and so

forth, we made a decision not

to bring forward a quarter,

but an additional quarter,

something which has been

welcomed by the local

Government association. My

point is this. That if you

look at the balance of the

budget over the four years, the hundreds of decisions

that have to be made to

achieve the spending to - the

payment to GDP ratio that we

have achieved, you don't

achieve that by shuffling and

let me tell you, our figures

add up to surpluses not just

12, 13, but going over the

forward estimates, but what

has Mr Abbott got? What has

he got? Tony Abbott has got

a big black hole. I want to

get to that. Just one other

item that does look like a

shuffle and that is school

kids bonus. It will be a

twice yearly payment from

next year. But this year you

are giving those eligible

annual lump sum in June

rather than July to get in before that financial year

starts. David, there is a

very substantial policy

change that the Government

made as part of the budget.

And the policy change, which

we have explained, is that rather than having this

payment as a refund, we are

making it an up-front payment. But why June, not

July? We are making it an

up-front payment and why do

we do that? You might recall

about a million families were

missing out. People weren't

keeping the receipts.

Unsurprising, families, busy

life, you don't always keep

the receipts from the school

books and the school uniforms

and so we have made a

decision to make this an

up-front payment and we want

to pay it up-front so people

can get that assistance. I

think the big question for

Tony Abbott and that he

should explain tonight to 1.3 million Australian families

is why he opposes parents

getting this sort of assistance for school costs?

Because he has. Well, you've

been demanding he spell out

tonight where all the money

is coming from. In

opposition, did Labor ever

really do that when it was

this far out from an election? A couple of

points. Certainly we put

forward costings and Tony

Abbott was very critical of

Labor if he believed that

when he was in Government, if

he believed we weren't up to

the mark and we put forward

far more than he has done.

Far more. I make that point

first. Go back and have a

look at what he said in 2003

when he said what a budget

reply should include and he

said what it should include

is what your plans are and

what you are going to pay for

them. My sec point is this,

Tony Abbott isn't just saying

I'm the leader of the

opposition, he is demanding

that he be Prime Minister not

in a year's time or after the

next election, but he is demanding the Prime

Ministership now. He is

saying I should be the Prime

Minister now, you should be

supporting me over - he is saying this to the

Parliament, and you should be

supporting me right now.

Surely it is time that he actually fronted up to the Australian people and said

these are my priorities,

explains why he opposes the

school kids bonus and why he says... The opposition says if they announce all their

spending cuts, they will

pinch them. Oh goodness

me! Low and behole on budget

night you have made a big cut

in the public service.

David, give us a break. That

is Joe Hockey's, one of his

more ridiculous answers to

the question of show me your

savings. I mean, seriously

he is saying we don't want to

show them to anybody because

they might pinch them. I

mean, it is laughable. The

reality is... You have

announced a big cut in the

public service and you are

not ruling out further cuts

there if you do have to

protect that surplus. Well,

can I finish the previous

question? Sure. In terms of

- in fact, I just caught the tail-end of your panel and

Peter made a very good point

that this Coalition, this

opposition, doesn't have a

coherent fiscal policy and he

is right. We have seen from the election where their

costings were found to have

an $11 billion black hole, we

have seen stuff up after

stuff up from the Hockey/Rob

team under Tony Abbott. They

have never got their costings

right and now instead of

trying to get them right,

they just want to hide. I

don't think that's good

enough for the people who

believe and say they should

be in Government. All right.

We will have to leave it

there. Thank you for joining

us. Good to be with you again. As I said, Tony Abbott's budget reply, we

will see what he does

announce or not announce

tonight in terms of paying

for all of those promises.

7.30 tonight here on Sky News

and the Nation following

straight after. We will have full analysis here on Sky

News. After the break, the very latest news.

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