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Early Agenda -

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SUBJECTS: Newspoll, Enterprise Migration Agreement, price on carbon

KIERAN GILBERT: With me on the program this morning the Shadow Environment Minister Greg Hunt and
the Minister for Small Business, Housing and Homelessness Brendan O'Connor.

GREG HUNT: Morning.

BRENDAN O'CONNOR: Morning.

KIERAN GILBERT: Gentleman, good to see you. Brendan, Labor inches up, second boost in a month, are
you encouraged by that? It's still pretty low but is it encouraging?

BRENDAN O'CONNOR: I'm not going to start to analyse polls, I've never done that and won't do that
now, but I make a number of observations: I do believe it's true that if you are constantly
negative as Tony Abbott is, if you are focussing on the wrong issues, if you are not developing
policies for the nation, then you get marked down. And I think we've had a very important Budget
for this country; returning to surplus, providing benefits to pensioners, tax payers getting cuts
from the first of July, these are important things. These are the things that matter to Australians
and I think there's no doubt, as a neighbour said to me, persecuting a parliamentarian using the
parliament is no replacement for good policy.

KIERAN GILBERT: Labor's still very dire isn't it? As one Labor MP said to me at the last Newspoll
that the problem for you guys at the moment is that your expectations are so low that even if the
number's dire it looks good.

BRENDAN O'CONNOR: I'm under no illusion and that's why I'm saying, when you suggest I should be
pleased, I am a realist. I know that we've got some challenging times but we are looking to
introduce into this country some significant reforms for the benefit of all Australians. Our focus
is on those issues. And we know when reformist governments embark on those major changes it is
challenging.

We're going through those difficult periods now but we believe that it's in the right interests of
this country and ultimately we will be vindicated.

KIERAN GILBERT: Despite the Coalition's enormous lead, Tony Abbott's approval rating is at a record
low, how do you reconcile that?

GREG HUNT: Well the first thing is something tells me they probably won't be high-fiving in the
Labor caucus today, that this result which many are championing as a tremendous comeback would
still lead to the worst defeat since Whitlam of any party in the federal government in the last 35
years in Australia.

The second thing is we are getting on with the business of building the alternative government as
well as holding this Government to account, so a blueprint for Australia - five great national
plans, that's the task.

We hold the Government to account and obviously their high-water mark is everybody else's low-water
mark. And at the same time build out that alternate picture of a blueprint for Australia based on
this idea of giving people a sense of hope and of opportunity and of capacity to do things through
simplification and that's what we're doing now and that's what we'll do a lot more of over the next
months.

KIERAN GILBERT: The debate's been acrimonious though, you'd have to concede that, do you think that
part of it has backfired on the Opposition Leader personally?

GREG HUNT: Look I respectfully don't accept that. Let me say this, the parliamentary compact is
about parliament working when parliamentarians can express their views freely and without fear,
that's why there's parliamentary privilege, but it fails when that privilege is abused. So let's
take everything that's outside of the parliament and forget it.

What last week was about is enabling the parliament to function on that compact, the higher ideal
that you cannot as a member of parliament mislead the parliament, and you cannot as a member of
parliament use the parliament, without profound evidence, to traduce, denounce and destroy the
reputations of others. And if you don't protect those as parliamentarians you help erode the
institution.

KIERAN GILBERT: Sure, I don't think you - but on the specifics of Tony Abbott's approval rating
hitting a record low, disapproval record high, it just seems incongruous with a party that is so
dominant at the moment in terms of your primary vote, as you mentioned, it would be a win of
enormous proportions but Tony Abbott's not getting the same credit, why is that?

GREG HUNT: Look, we are in the process of holding the Government to account and that is a
challenging task, but let's be absolutely clear here that the country appears to have lost
confidence in the ALP. The country appears to have lost confidence in the Prime Minister. And
beyond that our task is right now to help build the sense of the alternate Australia which can be a
significantly better version of Australia than the one which is currently being -

KIERAN GILBERT: Okay, I want to play a bit of Martin O'Shannessy, the Newspoll Chief. When it comes
to the Labor primary vote he says it's far too early to say it's any sort of a trend, let's hear
him on that:

MARTIN O'SHANNESSY: At the end of last year they fell to 26 and recovered. They've now gone to 27
and recovered. Perhaps it is the beginning of a trend, certainly too early to tell and at 32 if
we'd gone to 32 and when we did go to 32 it was regarded as quite disastrous so it's still a very
bad position to be in. But five points in the last month could be seen as the beginning of a trend
and we need to do that twice more for the Government to be in a position to reclaim Government in
their own right.

KIERAN GILBERT: Will this start or potential start of a trend, it's too early to say as Martin said
there, will it be enough to give the Prime Minister some breathing space on the leadership?

BRENDAN O'CONNOR: Well I think for the Government, as I've just earlier acknowledged, we've gone
through some difficult times and reform is very difficult, particularly fundamental reform and
we've got the most negative Opposition Leader in our history, I believe.

But I think from the first of July, the scare campaign that's been waged by the Opposition will
fall away, the facts will reveal themselves, and the allegations and wild assertions that have been
made in relation to the impacts of pricing carbon will be shown to be the falsity they are.

I think that certainly will be something that will be well received by the public to get the facts,
to know that the benefits are there, to be compensated for the reforms, and to realise that the
fact that Whyalla was supposed to be wiped off the face of the earth according to Tony Abbott - of
course that is a thriving community and will continue to thrive. The mining sector is booming, we
have $500 billion of investment in the pipeline. We have the lowest unemployment, one of the lowest
debts, 800,000 jobs, contained inflation. We've got the best economic indicators, we've got good
growth and I think those things will come to the fore.

But we always understood when you embark upon fundamental reform, Kieran, you really do have
challenges, and I think that is going to ease as we go forward.

KIERAN GILBERT: That's obviously the Government's hope, that the payments that started yesterday in
fact, those pension increases that kicked in yesterday, quite significant one-off payments and they
will continue through an increase in the pension when the carbon tax kicks in, are you at least
slightly worried that it's going to placate some of the concerns that have been fostered by the
Opposition?

GREG HUNT: No, I think that at the moment what you've got from the Government sadly is denial and
division. We see the division breaking out between the Prime Minister and her Ministers over a
decision last week in relation to the Roy Hill mine and the denial is about the nature and the
impact of the carbon tax.

Last week we saw 344 jobs go at Kurri Kurri which is an aluminium smelter in the Hunter, right next
door to Greg Combet's own electorate. The company itself cited the combination of short term
factors against the long term issue of electricity prices and the carbon tax.

BRENDAN O'CONNOR: That's not true.

GREG HUNT: The company, I've got their press release here, there's no question they said "factors
including increasing electricity cost and the carbon tax"

BRENDAN O'CONNOR: The contributing factors on why they closed have nothing to do with the carbon
tax. This is the scare campaign I'm talking about.

GREG HUNT: No, no, when the company says it's the carbon tax, maybe we should take them at their
word.

BRENDAN O'CONNOR: Well, I think you're verballing the company -

GREG HUNT: Beyond that -

KIERAN GILBERT: I think I'll come back to that in a moment.

GREG HUNT: What we've also got is 104 councils around Australia that have just received show cause
letters from the Clean Energy Regulator as to why they shouldn't be paying carbon tax on landfill.
Three of them surround your own electorate. We've got the Macedon Ranges, we've got Hume Shire and
Wyndham City Council immediately to your south in the Prime Minister's electorate which is budgeted
for $13 million of carbon tax liability on their landfill - that one council. So that's just
surrounding Brendan's own electorate, three councils all about to be hit.

KIERAN GILBERT: What this does show to you, though, is that the Coalition, on all sorts of fronts
can go at you on the carbon price.

BRENDAN O'CONNOR: And they will seek to -

KIERAN GILBERT: And that company did refer to the carbon tax in its news release -

BRENDAN O'CONNOR: But let me, just in terms of the contributing factors that led to its decision to
close, which is a very disappointing decision for all of those workers, the primary contributing
reasons were not to do with pricing carbon, whatever other comments were made by that company. But
of course we do expect the Leader of the Opposition to continue to attribute any loss of any job in
this country to carbon whether it's true or not.

This Leader of the Opposition is so negative he will attribute factors that are not in fact part of
a reason for a company to make a decision to close. And we don't expect any change of his demeanour
in that regard. But I think in the end Australians will see through that, the Australian public
will see through that and realise that we have to embark upon change to make sure we reduce our
carbon emissions.

And remember Kieran , it's not about what we do and nothing, it's about whether we take a
market-based approach that Greg used to support or whether we support the Leader of the
Opposition's approach to imposing $1300 of taxes upon each household, per annum, to pay for the big
polluters to change, restructure their companies. That's not the best approach.

GREG HUNT: That is of course false -

KIERAN GILBERT: We've got to take a quick break, apologies for the break in there, we'll take a
quick break on AM Agenda and we'll be right back and have the latest on this tragedy in Doha, we'll
be crossing live to Auckland for the New Zealand Prime Minister's comments on that so stay with us.

*Break*

KIERAN GILBERT: Let's move on for the moment and talk about our domestic politics and the
Enterprise Migration Agreement which has been the focus of much debate here. Brendan O'Connor,
there's a bit of division in Government ranks, isn't there, as to going ahead with this? The Prime
Minister seemed to struggle yesterday in saying that she actually supported the Rinehart deal.

BRENDAN O'CONNOR: Well I didn't see that. I saw her articulate her support for the approach to
ensure that the major projects in the mining sector are facilitated, provided that Australian
workers are given first option for those jobs.

KIERAN GILBERT: But it took her one hour to say that she backed the deal.

BRENDAN O'CONNOR: Well, she was asked questions, she outlined all of the benefits that flowed from
those. What the Opposition wanted was a yes or no, they think that she's in the dock - well she's
not, she's in the parliament. She's the Prime Minister, she's asked a question about the benefits
of the arrangement under this scheme that the Government's actually determined some time ago.

The Roy Hill project is a huge project, providing almost 7,000 jobs for Australians and of course
there are up to 1,700 places for overseas workers if they cannot be filled by Australian workers -

KIERAN GILBERT: Why did - I don't understand why, if the Prime Minister did indeed think it's a
good idea, that it took her one hour -

BRENDAN O'CONNOR: Well firstly -

KIERAN GILBERT: Six questions to say yes.

BRENDAN O'CONNOR: Well, because you don't just get to say yes or no, you get to articulate your
view. And I think it's fair to say, when it comes to this issue, this is a clear issue where it
confuses the Opposition that we can oppose Gina Rinehart on one matter and support her on another.

Well let me tell you this Kieran, we will support something that Gina Rinehart puts forward when
it's in the national interest; when it's in the national interest. When she opposes the MRRT, the
Minerals Resources Rent Tax, we'll stand her up, because the MRRT is in the national interest; it
may not be in Gina Rinehart's.

But when her interest and the national interest can coincide, as is the case with the Roy Hill
project, we'll do that. But what we've said, and what the Prime Minister wanted to ensure, was that
Australians get first option of the jobs and that's fair enough.

KIERAN GILBERT: Greg Hunt, the Opposition has said that you support the idea but are not willing to
give the Government the tick of approval on this one. Again, is it just all about the politics?

GREG HUNT: No, we have strong support in-principle for the concept of where you can't find
Australian workers, it's appropriate to have these Enterprise Migration Agreements. We are
absolutely clear on that.

What is interesting here is that it's almost as if even if the Government gets it right, the Prime
Minister gets it wrong. What's at the heart of this issue at the moment? It's not so much the
agreement, because it's about 8,000 jobs of which at least 6,300 are for Australians and hopefully
a large proportion of the other 1,700.

But it is about the fact that when confronted with the issue, the Prime Minister told the unions
she was furious and she didn't know about it. So that's about an instinctive capacity to mislead
under pressure and that's the flaw at the heart of the current Prime Minister. You've got to be
elevated, you've got to take the difficult decisions and take responsibility and those genes appear
to be missing.

KIERAN GILBERT: The Prime Minister does want to say that there will be greater oversight of this
agreement -

BRENDAN O'CONNOR: Sure -

KIERAN GILBERT: She's obviously trying to placate the unions and some of her own MPs and she's
going to have to do that before caucus today -

BRENDAN O'CONNOR: Sure, of course, and everything that Greg just predicated those remarks on were
based on private meetings that no-one has been privy to other than the people in those rooms. But I
understand that that happens - assertion upon assertion and then determine it as a fact. The fact
is we have caucus meetings -

KIERAN GILBERT: Are we going to see more red tape?

BRENDAN O'CONNOR: No, what we're going to have is we're going to have a facilitation to expand the
mining sector as we should but we are going to have regard for jobs. Labor Governments put the
interests of Australian workers first. That's not the case with the Opposition when they were in
government in my view.

And of course, yes, look, this has been a bit messy but you know what? We are pretty passionate
about jobs and if others - you know, Senator Cameron said..., he was a self-described zombie in the
parliament before; well, he's expressed a concern. His concerns are legitimate - I believe that the
caucus will resolve this to ensure there is oversight for Australian jobs.

KIERAN GILBERT: Who overstepped the mark there if it's been a bit messy? Was it Chris Bowen and
Martin Ferguson that went too far instead of saying 'okay, we've got to consult with the Prime
Minister properly'?

BRENDAN O'CONNOR: Certainly the logistics could have been handled better about how it was
announced, there's no doubt about that. But you know what, let's not romanticise governments,
sometimes things happen in a messy way. But is this good for the country? Yes. Should we have
concern for Australian jobs? Yes. Are we putting up proper effective oversight? Yes. Will there be
a debate in the caucus? I'm sure there will be, but I think we'll resolve -

KIERAN GILBERT: The announcement was made by Chris Bowen, so therefore you're saying it was his
fault, that he should have -

BRENDAN O'CONNOR: Oh look, I'm saying it could have been handled better by the Government. It's not
about apportioning blame, it could have been handled better, but you know what? This is a good
initiative by the Government and fundamentally, will it mean more Australian workers will be in
jobs? It will. Will the mining sector be able to expand? It will.

But I think the biggest point to make here is where we don't support a proposition by Gina
Rinehart, we won't support it if it's not in the national interest. Where it is, we will support
it.

GREG HUNT: Let's just decode what Brendan said. To be fair, Brendan is I think a very decent guy.
He's basically said that Chris Bowen, in making this announcement, undercut the Prime Minister.

BRENDAN O'CONNOR: I didn't say that at all.

GREG HUNT: What did Chris Bowen do? He said it publicly, he said it on the day when the Prime
Minister was meeting with the unions, and instinctively the Prime Minister, in a difficult
situation, denied the facts.

We know from Parliament yesterday that the Prime Minister's Office was briefed on the Monday and
that she was briefed when she landed on the Wednesday. The Prime Minister, under pressure, simply
denied the truth and that goes to everything -

BRENDAN O'CONNOR: That's not true.

GREG HUNT: about this Prime Minister -

BRENDAN O'CONNOR: That's another verbal.

GREG HUNT: When the decision is made, she denies it in a difficult situation. It's cause-effect
pattern pathology and it's unacceptable for a Prime Minister.

KIERAN GILBERT: Did she drop one of her Ministers in it as well by -

BRENDAN O'CONNOR: No, I think the fact is that we've now determined a very important Enterprise
Migration Agreement for a large project which I think is a good thing. If we're going to have -

KIERAN GILBERT: Chris Bowen, he was clearly not happy about it clearly yesterday in the Parliament,
saying in front of the Prime Minister -

BRENDAN O'CONNOR: What he made clear -

KIERAN GILBERT: 'we briefed your office specifically on the Monday, let's get that on the record',
standing next to her -

BRENDAN O'CONNOR: He said that in the Parliament -

KIERAN GILBERT: I know, but what I'm saying he did that next to the Prime Minister -

BRENDAN O'CONNOR: And he went on to advance the -

KIERAN GILBERT: He made the point very clearly, didn't he?

BRENDAN O'CONNOR: - and made the point that it's not only in the interests of the mining sector but
of Australia generally and the Prime Minister did the same. Whatever else you want to take from
this Kieran, if you read the

comments or listen to the comments of both the Prime Minister and Minister Bowen and Minister
Ferguson, they all supported this approach.

KIERAN GILBERT: Gentlemen, I'm sorry - Greg, just 10 seconds.

GREG HUNT: The Government isn't divided, it's got a chasm between the two camps; it's absolutely
clear and increasingly so.

BRENDAN O'CONNOR: Just watch out for Malcolm Turnbull.

KIERAN GILBERT: We've got to go. Thank-you, Brendan O'Connor, Greg Hunt, good to see you both.
That's all for AM Agenda.