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(generated from captions) Hello welcome to the

Contrarians this the only

show on Sky News oi anywhere elsewhere we truly involve

you the viewers by reading out your tweets and e-mails.

Labor leadership here we

go again. Joel Fitzgibbon

kicked it off on Monday at 'Q

and A' where he offers some

frank assessment of where

leaders are at if they have

poor polls, that is they get jumped. Julia Gillard has had

nothing but poor polls and yet apparently she is not

being dumped. Who are her supporters, increasingly it

look is like it may be the

union movement, isn't that a

great look optically to have

union heavies coming out and

arguing they will withdraw

funding from the Labor Party

if in fact the Labor Party

switches to a leader that

more than two out of every three Australians would prefer over Julia Gillard if

the polls are to be believed. The rut that Labor

is in now is that in almost

equal amounts the number of

people that want Kevin Rudd to come back amongst the

public and amongst a growing

circle of the backbenchers

match up to the ministers who

enjoy their shiny white cars

and salaries who know they

will be out on their

backsides because of things they said about Rudd previously, means that this

is a stand-off. A stand-off,

a Mexican stand-off right there in the federal

parliament and in the middle

of it you have someone like

Rob Oakeshott coming on the

line to Sky and talking

through why don't we have an

election now, at least it wasn't a 17 minute

conversation on the phone,

but at the end of the day it

is a mess, and it's an unmitigated mess that it's hard to see how you get

through it and you have

someone like Wayne Swan a

parody of a human being it

has to be said, standing

there saying this is all a

media beat-up. It is nothing

more than that, what a joke,

this is the same guy that

said the same thing seven

days before Kevin Rudd got

knifed, he said this is all a

joke, give it a rest fellas there is nothing happening

here, it is absurd, it is

Monti python-esque, it is our government. Tim Wilson are

you still with the IPA. I

am. Deanne Madigan and noted lefty Rhys Muldoon. Welcome

back to you program. It is

very good to be back to this fine difference functional

family that is Contrarians. I

have been filming a

television show, nothing to

do with politics. You have had your ear to the ground, I assume you are very close to

Kevin Rudd he would have been

talking to you about his

strategy. What has happened if He hasn't been talking to

me about his strategy, of

course as everyone has noted

he Hasler been very quiet

indeed. What does that tell

you? It tells me something

is going on. Very quiet. Like

I mean, seriously, that when

he said he's not going to be

doing anything in being very

quiet after that last spill.

His supporters Dee Madigan

are jumping in there, there

is nothing, there was

quiteness not just have Rudd

but from his supporters as well and this week there is

no doubt, just the conversations I have had plus

what I have read about some

of other Rudd backers they

are starting to agitate, they

are sick of it. I'm not sure

that was true, there was the Joel Fitzgibbon comment which

was probably not the wisest

sort of, I'm sure it was

quite deliberate what he sort

of said, but it wasn't

helpful but I don't know that

there is that much agitation,

I think it is sort of more in

the media than anything else. I took the declaration

of the unofficial campaign

was the front page story of

Therese saying, he will only

come back if it was for the

good of the country and I will support him if it's for the good of the country.

Isn't that the official call. That's Cold War right

there do you think. I think

that's a start of it. It is

an incremental campaign, we

have seen Joel, there is more

stuff coming up. It is

getting started I think we

agree. I agree with you Dee

in the sense we are only

talking about handfuls of people who have either

switched or thinking of

switching we saw last night

last night on the antecedent report discussion about

Richard Marles and Kelvin

Thompson switching and that's

true so there are elements of Victoria coming across,

joining elements of NSW have

already come across. Victoria is the battleground for the

ALP. This is why this

bi-election is so fascinating

you think... The state

by-election in pebble. You

think if the ALP can't do

well in Victoria. With the

Victorian leader. It is -

with a Victorian leader and

all that sort of stuff, if they are keeping federal

Labor away from the state

election, and saying please

don't come down and

interfere, that's not a good sign. You talk about staying

away from the state election, Julia Gillard went to parliament earlier in the

week and where did the leader

of the WA Labor Party go? He

came to Sydney. What does

that tell you, get as far

away geographically within

the country as you can. She

hasn't appeared once during

the entire by-election in Melbourne understandably

so. The polls are closer than

they - they had them -

pretty much neck-and-neck. I

think Labor might win

just. Fiona Patton is preferences Greens which

means they may get ahead. Dee

you are a fan of Wayne Swan

should they be running him

through Melbourne at rapid

pace to try to left the vote

between now and then? I think

it is a local election and

that is what it should

be. You don't think federal issues come into this at

all? I think they do but it

will be best for the

by-election if it was

contained. You have got to

say the state Coalition

governments aren't really

covering themselves in glory

at the moment are they. No-one cares, that's

not where the focus is. You

have got to go, the bail you

government is not really much

-- bail you government is not

really much chop and Campbell

Newman is not much chop. They

are doing quite well I think,

but I agree on the Bailieu government. He cut funding to

a school competition this week. He has been there nor

a hundred days. The point

about him is he is... $90

billion in debt. Dee you of

all people should know you

can't start to jump in and

attack a new Premier who won

pretty much every single seat

aside from the number of

seats here on the panel at

the last election, he's got a

bit of time before he's not

in a honeymoon surely. I

think he's out of the

honeymoon already. 'The Courier-Mail'. Didn't he

run... That will be a good

skulssy job actually. Consultsy job

actually. Peter Dee is

wearing the right coloured

dress, it is not actually a

dress. You can't see the

hammer and cycle. It is not very often we invite Rhys

Muldoon on the show and there

is a bigger lefty on the

panel. I am not talking about

you Mr Libertarian Tim

Wilson. For quick

predictions, who will win the Melbourne by-election

Tim? Labor just. Interesting. Dee. I

think so too, I don't think

the green votes is what you

think it is. If that's the

case, that's of enormous

benefit to Julia

Gillard. Enormous benefit? I

thought - you can't have it

both ways, you can't say it

either has no meaning or it

has meaning. It has enormous

amount of meaning but at the

end of it Labor will win but

win off a prime vote of 32%

and the seat of

Melbourne... Even wins...

Winning is good for her in

the short term. It is like

throwing a bone. Had she gone

in and campaigned in the

electorate they may not have won. Because then of course

you can read it and go they

won because she didn't come

down. That's how you can spin

that. How often do they go without her. That's right. They are damned if they do

and damned if they don't. A

loss won't be a complete

disaster for them, people try

to read into a disaster

prediction for Labor, the problem is the primary vote whether they win or lose will

be 32% and will be reliant on

a mish-mash of anythings and

nobodies at the same time.

There is 16 candidates. Will

we see the A -- P green

bashing stop? Do you think?

I think it's a mistake and

I think, because it is also just speaking to the

political class and those

into politics and all that

sort of stuff but it is about preferences as Falkner said,

I agree with him, saying,

having... You agree with him

on that, put a sock in it. Not Paul Howes per se, they can have their own

little fight. Pretty

good. The fact is that, I

don't know, I'm lost. You

have lost your thought. Just

to get things back on track,

this will happen regularly

now. We had an interesting

e-mail come in from Mark, not

Mark Latham, probably one of

last backers of the government. He said hi Peter

can you tell me what the

Gillard, not Rudd government has done wrong, other than try to make the parliament a

little more stable and court decisions beyond her control,

Tim. She set out three different indicator one was introducing carbon pricing

she's done that, that's bad

policy, she said she was

going to... A broken promise. Bad policy and broken promise she said she

was going to fix asylum

seekers. That's not her

father, the point that Mark

make -- her fault. It is the

point that mark makeser it's

the court decision. It is

fair to say the court

decision got in the road of

what she wanted to do. It did

get in the way but it doesn't

change the fact. What was the

third indicator. The mining

tax? She sort of legislated

one that's in the interests

of big business and is

harming small er miners and

doesn't have that much support. The mining tax, this is a side issue but at

the end of the day they get

in a room with the three big

miner, Rio, XStrata and BHP

they nut out a deal in

private and they come out and

announce it am I wrong in

thinking you this happened in

a state level you have crime

and corruption involvement.

At a state level that would

be considered dodgy, at a

federal level it is all OK. At a state level you couldn't

get away with that. You know

my feelings on the mining tax

I think the whole thing is scandalous beyond belief and history will look very

dimly. History is hereand

now. Not just here and now,

it is just surprises me, when

you see the cycle of Australia's economy over

whatever, 200 years you will

go what happened there. What

happened there when you could

have had all that money and

now you haven't got

any. Dee. Do you think it is

skarndlus we do have a mining

tax. I think it is scandalous

it is not big enough. I am on

Twiggy Forest's side of

this. Complete lefty love in

going on in the room. They

are not sure whether we have

gone far enough in the left

and whether we have killed

the economy enough. We have to start somewhere and at

least it is in there and then

it can be increased like the

carbon tax. So, you want to see this carbon tax go up

like every good lefty does

but, I agree with you

completely if you saw this at

the state level it should be

at the same at a national

level you get big government

and big business in a room it

is a disgrace. We won't get

on to that but we will get on

to the car industry stuff in

a moment but at the end of

the day, the irony of your

mate Swanny standing up

there, and saying, you know,

line heart, Clive Palmer

trying to associate the

Liberal Party with them and

attack them as a consequence

of what he's gotten in a room

and done a deal with the

biggest three miners in the

country and excluded all the

small miners not to mention

any version of transparency

or oversight on what this

deal was, it was

ridiculous. I don't know how

it is workable to have every

single miner in the room You

will be here for years. White paper process or

something to that effect. They do it on everything else thee guys

know how to run committees

through the door at rapid

pace. This wasn't, we got

something through, and we

have a miner tax. I don't

think it was the best way to

do it but it's through. A

minimal mining tax which is

incredibly, even Ken Henry

agrees with this he now

thinks it wasn't all worth t

he's been kwtded as saying

during the week but he says

it is a mining tax which is

incredibly volatile, driven

by commodity prices yet what

it's been tied to is very consistent spending priority

which is will continue to go

up and up and up, in other

words what it's done is it is

exacerbated the structural

deficit, within the budget. But that's the same thing happened with the

carbon tax as well, where

once it goes to its floor

price if they throat the

carbon price under an emissions trading scheme, the

government will have a huge budget deficit caused by that

as well. This is all short

game politics played by the

government that actually

isn't good public policy and

will have a very big impact

and create huge problems for

whoever is in government

after the next election. After the commercial break we

will continue with the panel. panel. --

Welcome back you are

watching the Contrarians we

will continue this 17 minute

segment talking about Rob

Oakeshott's comments today

but first let's take a look what's making news.

Key independent Rob

Oakeshott has threatened to

pull the pin on his support

for Labor as leadership

speculation continues to

linger. Mr Oakeshott says he

will help to bring on an

election if the ALP continues

to focus on the leadership

over policy. The MP also says

that the agreement is with

Prime Minister Julia Gillard,

and not transferrable to

anyone else. A court in

Sydney has ruled that text

messages will be allowed to

be submitted as evidence to

support claims of a

conspiracy in the case

involving Peter Slipper. And

James Ashby. In the meantime the Australian Federal Police have finalised the

investigation in relation to

fraud allegations made

against Mr Slipper the AFP

has forwarded twerl to the Director of Public

Prosecutions and will

consider the need for further

action. Rush And China have

vetoed a UN Security Council

resolution threatening Syria

with further sanctions. The

move has been seen as a blow

to efforts to resolve the

ongoing conflict and comes as

the security council failed

to pass a resolution

extending the UN monitoring

mission in Syria. In the

meantime footage has emerged

of president Assad swearing

in his new minister after the

deadly attack on his inner

circle. Hundreds of family

and friends have gathered in King's School in Sydney's

west to farewell Kelly who

died after being king hit in

Kings Cross. His father

delivered the eulogy for his

18-year-old son. The man who'lledly threw the fatal

punch Kieran Loveridge has

been charged with murder and

will make an application for

bail next week, Steve Kearney

is out of a job at Paramatta

after today, he's announced

he's stepping down as the

Eels coach it ends a tumultuous tenure at the blue

and gold which he guided

Paramatta to nine wins from

41 game, in the meantime Luke

Lewis has found a new home at

Cronulla signing a new four

year deal to join the sharks. The forecast:

Welcome back, this is

the Contrarians I am joined

by Tim Wilson, Dee Madigan

and noted lefty Rhys Muldoon

we have had the tweets and

e-mails coming through,

please keep them coming.

Pauline says Peter you are so

one eyed when it comes to

Julia Gillard, it put puts me

off you as a reporter. I'm

not a reporter I'm a

commentator, I'm supposed to

have an opinion and my

opinion is she's been a hopeless Prime Minister.

Marie has e-mailed in and said Peter where do you find

these lightweights from the

left? Tim has come up from Melbourne at the end of the

day what do you do? Neil

has said, the problem lies in

that previous e-mail that

came through from Mark, when

he asked, what has Gillard

done wrong, he really should

be asking basically according

to Neil what is it that she's

actually done right. Paul has

come in and talked in

relation to what you said

Dee, Campbell Newman's

primary vote is even better

than what it was prior to the

election. It hasn't changed

yet that's the point. The

other point made was the

reason the state Coalition

governments are not setting

the world on fire is because

they are sorting out the

absolute mess they took over

from the defeated incomp

department and wasteful Labor

governments at recent state

elections, I think it's a bit

more than that, I think there

is pretty weak talent on the

Liberal front as well. If you

take the context of Campbell

Newman $90 billion of state

debt, you can't complain

about someone who is coming

in to try to save the

patient. Don't blame the

doctor. Except the funding of

the court case he can't win

for the likes of Clive

Palmer. Do you mean like the

Malaysia Solution? If he

needs to save money he

shouldn't be funding a court

case he capital win. If it

costs the stage billions of

dollars then it might be the

right decision. The

government thought it was

guaranteed to win the

Malaysian situation. Even

Western Australia know the court case isn't

winnable. What are you

suggesting by that? If they thought it was winnable they

would have gone for it as

well. A silly decision. It

is incredibly

geographicist. East coast,

Canberra, Sydney, Melbourne. They don't understand real

estate. Speaking of not

understanding things, Rob

Oakeshott. God, yeah. Some

comments today he's made, basically threatening to have

an election sooner rather

than later which will see him

wiped out of his seat. What

are your thoughts on that

Rhys? Of course it is hollow threats, they couldn't be

more hollow. Maybe he wants

out. This is his one big shot

really, like he's in the spotlight. The clock is absolutely ticking but the

clock is always ticking. But

there is no way he'd walk

away from having a balance of

power and certainly one of

the key members of a balance

of power, there's no way. Absolutely empty threat

and going beyond the

election, what's he going to do next this guy is tainted with a government that nobody

likes, that will be deeply

unpopular for a while to come

yet. And, is he a 50-year-old

bloke, I don't know how old

he is. He can join the public

speaking circuit. I don't understand why people are so

mean about Oakeshott

seriously. He uses words to

say nothing. Because nobody

else does that in Canberra.

No he ex els. Local

Rotary Clubs don't pay that

much for speeches at the end

of the day. The savabling of

this poor bloke. You are just

trying to be a Rudd backer

keeping him on side in case

Rudd comes back. I think he's

a decent bloke and I don't

get why everybody picks on him. Probably because he turn

coated on the nationals and

backed a government that's

turned out to be rather

incompetent that will be the

public view. Alright. I'm

Robinson Crusoe,

whatever. Mail or tweet us if

you like Rob Oakeshott.

Let's see what happens.

Deeply unpopular government

from a, what is perceived to

be conservative or at least National socialist, where

government is deeply

unpopular. What do you

expect? They are going to

love him for doing that? No,

I'm not saying his electorate

love him, I'm saying the

savaging of Oakeshott, the

attention that he gets and savaging for his 70 minute

talk, when he was deciding on

who to vote for, I was there for that. That was

compelling. It wasn't

compelling. I was right there

and I'm telling you, everybody's going... Because

they were Waite ing for him

to answer the question. We

all knew the answer and it

was why can't you just shut

up so we can move on with the

rest of our lives. It is 17

minutes of our lives we will

never get back. The e-mail test, what has Rob Oakeshott

done right? He supported the Gillard Government Apart

from that. Hetsz helped get

the legislation through.

He's actually not a bad representative sample here, you have got one Tony Abbott

supporter, 25% of the panel,

that's about how many people

like Abbott, have you got one

Julia Gillard supporter, 25%

of the panel, and you have

two people who think Kevin

Rudd should come back, two to

one versus that. That's about right, it is pretty representative. But you

actually think Kevin Rudd

will save the government? I

reckon if you put Kevin Rudd... Not that he will save the government he will

save seats. He won't even

save that I reckon. It is

not that he will save the

government it is he will save political commentary, it's

getting so boring. We have

had various incarnations of

this new segment. Including

say something night about the

Gillard government. We had an

e-mail earlier saying I can't

think of anything nice to say

about the Gillard government.

Only that there will be a leadership change maybe,

perfect segue.

So we will start with

you Dee, a huge Kevin Rudd fan, say something nice about

the return of Kevin Rudd.

God... Have a listen to

her. My producer said we should call it possible

return, let's be honest.

Let's take the ambiguity, it

will happen. Labor's best

chance of a decent election

result is time and, you know the longer they are in the more chance of a better

result and I do believe that. Will you say something nice about the return of

Kevin Rudd, for example, it

would see the departure of

people like Wayne Swan. I

don't think that's a good thing. Most Australians

do. You are asking me, you

see. We have to move on then. It will be fantastic

because the Liberal Party

will be able to run ads

saying we think Kevin Rudd's

a lunatic but don't trust us,

what do you think Wayne Swan,

Treasurer. Former Treasurer,

Kevin Rudd's first Treasurer

and they will be able to bash

him. What do you think Nicola Roxon. There has been a lot

of talk about what Tim is

saying, but I think the

public have such low regard

to the extent they even know who these people are for a

lot of people who did bag

Kevin Rudd that I'm not sure they will do anything other

than reinforce why Kevin Rudd

the outsider has come back to

save the Labor Party. I

absolutely agree with that, I don't think, it's the

presumption that just because the way Wayne Swan spoke

about Rudd, the way Roxon,

that therefore those ads are

ready made for the Liberal

Party and they will be huge,

have a huge impact I just

don't think they will. Labor in-fighting. That's the segment we will not give Rhys

Muldoon a chance to say something nice about Kevin

Rudd because let's be honest

you wouldn't believe. The the guy sucks up to him like

best of times. Moving on

the car industry.

Important subject. Don't

laugh about it Tim. I'm

not. A lot of job losses

during the week. You should

ask Dee what kind of car she

just brought. Don't. Was

it an Australian car? No it

wasn't. And hence the problem

Tim. I think over 400 jobs

being lost from Ford Australia, the likelihood

more will go the government

is pouring money in may be

good money against bad,

stemming the tide of some of

the job losses what's your

view, should we be producing

cars in this kindtary if they

can only be -- country if

they can only be sold

domestically or shut down if

they can't be sold overseas. I'm neutral about t I think it departments what

the market says. As I wrote

in the fair favm press today,

this car pack is a $5.4

billion after 2020 should be

the last package there is to

support the industry I.

That's eight years it gives

eight years to people working

in the industry. Where did

you write this? In 'The

Age'. I offered it to 'The

Australian' first actually. In case anyone at the 'The

Age' missed that, they

published 'The Australian's sloppy seconds. Because we didn't think it was worth publishing whatever it is

that Tim wrote today. That is

Melbourne specific, a beautiful. Also more

different argument. 'The

Australian' first by the

should go if the market way. Anyway, absolutely it

doesn't want it. The market

doesn't want it if you look

at the government's own data

from 2003 to 2010 the number of passenger motor vehicles

in this country have stayed

consistent around 600,000 and

at the same, sold in

Australia, 600,000 at the

same time the number of local

cars being sold has dropped

from 40% to 15%. The market

is sending a message, move on people, let's save the

taxpayers dollars and give

new generation of workers a

new nuntity. So what do you

think about the fact that car

companies get subsidies all

over the world? It is

obviously not just

Australia. All be removed. So

we will be the first one to

remove them is that what

you're saying? We can scale

it back... You put a

timeframe on it and I hate to

agree with him because I feel

like a need a shower but I

do. Listen to her. WA now

Timbo. This is corporate

theft, taxpayers money people

money to the Government so who work hard giving their

they can boost up the profits

of multi-national car

companies, $89.7 million went

to Holden this year that was

exactly their profit margin,

it's a disgrace. With a name

like that I can see why we

didn't publish it. A late entrant on the say something nice about the Kevin Rudd comeback from Mark again

saying they both deserve

credit because so far they have saved us from Tony

Abbott. This is good. I love

that, I tell you. Intellectual void on the

panel that was the kind of

thing one of guys should have

come up with let's be

frank. I wasn't asked. Here

is your chance. I think the

thing about a Kevin Rudd

comeback as I say it's purely

a tactical thing ulgtly and

will save a lot more -- ultimately and you will save

a lot more seats. It will be

an election wipe out. We will see Kevin Rudd at the church

evidence Sunday and enough to

make you an athest. Don't

shoot the messenger when we

come back we will try to move

away from leadership talk and

into some substantive policy,

Rice might have to go but

that's what we are -- Rhys might have to go but that's

do. what we are going to try to

Welcome back you are

watching the Contrarians I am

joined by Michael Willesee,

Dee Madigan and note the --

Tim Wilson, mad mad medicine

and Rhys Muldoon. We -- Dee

Madigan and Rhys Muldoon.

What do you want to focus in

on? I think we can talk about

Tony Abbott overseas and

defence, talking down defence

cuts which he voted for in

parliament I'm fairly sure

and Richard Armitage. He is

saying... It's not the done

thing. But also Richard

Armitage is a lobbyist who

has defence contracts from

America on his books. Dodgy

as hell and Tony Abbott who has been talking about the

carbon tax the whole time and

fight it with every breath

hasn't even mentioned it in

the two weeks he's been there. Because he doesn't

want to talk down the

Government. Doesn't want to

talk down the economy. He was

saying quite positive thivenlgs about the economy. He said nice things

about the economy in the New

York Stock Exchange. If we have defence

spending. Because he voted in

favour of the defence

cuts. You said you weren't

sure on that. I'm actually

not sure on that either. I could be wrong but I'm fairly

sure. Someone will tweet and

tell me. The point though,

isn't the point he shouldn't

be doing that over there?

That's something that it's a

bit of an unsaid convention

you don't do that. I am not

sure if there is right but I

thought he said in response

to a question, but I don't

see... That's true, it was

the first question I think

after his speech. I don't see why he shouldn't answer those

questions honestly. We have

a problem we are cutting

spending at a time we need to increase it and the question

was directly related to

Australia carrying its burden

to protect its interests in

South-East Asia against the

threat the that China and

various other countries mace oppose. What's wrong with

that. A whole bunch of

e-mails coming in offering

nice thing you can say about

Kevin Rudd, most based around

it will be an opportunity if

there is Rudd comeback to

give him the kick in we

couldn't at the last election. That's a big part

of this, stuff about Rudd is,

you don't get to throw him

out, we get to throw him out.

That's part of 9 social

contract. That's going to get

the Labor caucus on side. Sincerely that is part

of the sol contract we have

elected him we get to throw

him out. The public doesn't

elect the Prime Minister. No

but I'm saying, they kind of

do.... It's a lot more

presidential now you know

that. Than it has ever

been. This is where the

political cas have got it

wrong because I remember in

the situation, faced with

when they did roll Rudd and I

thought at the time he is

hopeless we should get rid of

him as someone who is engaged

in politics you take that

instinctive response but for

the vast majority of people

they get one say every three

years and they did clearly

vote for him, they feel

disenfranchise ed. We will do the same thing with Julia Gillard who was more

popular. Come on Dee. She

formed government. She broke

the trust with the public

first. The issue for Labor.s

now, is that yes, a credit

card come back allows people

to write a wrong in the sense of making their own judgment

about him, the key thing for Labor MPs is when they make

the judgment it is likely to

be a lot less harsh than if

they get the opportunity to make their judgment about

Julia Gillard. That's the

problem for Labor MPs it

might be the right done thing

to allow the country to just

poleax her at the next

election so it can get that

Kath artic experience off its

chest, but I think at the end

of the day, Labor will be

reduced to a football team

aren't they? I don't know,

leadership spills have just

not worked that well in the

past, so I wouldn't be

rushing for another one. This

doesn't count because it is

fixing up what happened last

time T is not the NSW

phenomenon all over again. It is going back to the

future. It's an admission

they got it wrong in the

first place. I'm not sure it

will work by the way. It

won't work. We have moved on

to policy, I think, I wonder

for policy I think we can go

to is this idea of tax reform

we were talking about that on

'the nation' last night, Joe

Hockey was on the panel and

raised the spectre of the GST

going up but he was very

quick not to advocate it

himself. Family trusts a few

months ago. I know about

that... That's a different

topic but he was talking

about the GST going up and

his point was for it to

happen it needs to be a push

by the states. Now Tim Wilson

you are a policy boffin at

the best of times what's your

view on this? Do you see a

scenario where there is going

to be enough political

courage in any brand of

politics to see the GST go

up? Because most economists

think that's what should

happen. It is but it depends

on the package, if it is a

broad-based structural tax

reform and you cut income tax

rates and increase consumption tax which is

basically the GST and drive the revenue to states which

is what it does I can see a

scenario but it requires a

bit of maturity in the political debate. There is

not much in it for the

Federal government. What it

will do... Why would a Commonwealth Government put

itself through the pain of

doing that. It's a tricky one. You have a government

for instance like the

majority of Campbell Newman

has or even slightly smaller

than that you can not dismiss

but factor in the opposition

that comes from, if it's a Labor government. Why would

they do it because you don't

get the direct depit. They get the growth in the pie. Because it is actually

right, we need state

governments to have their

funding much more untied,

there is a big problem

between the money that goes between the Federal and state governments and there isn't

enough money that goes to the

states, untied they can spend

based on local conditions and

scenarios. It is the factual

equivalent of moral hazard.

Have you a situation where

the Commonwealth has to do it but why would they because

they get literally no benefit

from it but political pain. Everybody gets the

blame because the states have

to accept an increase. That

doesn't matter, the Federal

Opposition whoever it is,

will attack the decision to

up the GST and probably win a

subsequent election over

it. If you have Coalition governments in state and then

Coalition in federal. It

won't abcross the board.

That's even less likely I

suggest to you because the

Labor Party by opposing it,

you need it to be a mixture,

you need it to be, state governments, that are of the

opposite political persuasion to a Commonwealth Government

doing it to wedge the Federal opposition. Do you believe it

is good policy. Absolutely.

You need to broaden the

base. Lower tax rates, and

build a more sustainable tax

income system for both the states and federal

government. You need kickers

for people on low incomes though because the

consumption tax smashes

them. What would it do to

state health budgets. Help

give them revenue streams. That's basically

what would happen. That's not

solely, but it will be a

large part. States will get

more money directly untied

and spend it how they want. Rather than the Federal government saying

government saying you can

have it money but spend it on

a Canberra centralised view

of the world. Kevin Rudd

would advocate doubling the

GST and still be more popular

than Julia Gillard. You need

to look after the people on

lower incomes because the

broad-based tax things make

my nervous because it feels

like there are better ways to

get more tax money than taxing every e single

person. The other thing they

can do is include all the

things currently removed from

the GST which would radically

change the structure of the

tax. Fresh food, education

and health. I am not arguing

deeply unpopular but if you

matched it with tax cuts and

everything else. This is part

of the problem with the GST,

the health and education

expense which included the

big growth sectors in terms

of household expenditure. The

thing is consumption tax, it

does disproportionately

effect unpied high income tax

where the cuts might come off

but the people who consume

the most are still the

wealthy they are the ones by

and large paying most of the

GST.. It is still people

industrialing to pay milk and

bread and those -- struggling

to pay milk and bread and

they they are people who can

least afford it and I think

there are better ways to tax

people. I have got to be careful of this but whenever

you see the list of the top

10 groceries it is Horizon cigarettes, dog food there,

is no food on the list.

Serus. That's because of the

cost of the cigarettes. Two

litre bottle of Coke is

always number three. So what

do you want to do? People

don't make good choices which

are therefore taxed. This is

the resident lefty who would

like to somehow legislate

what you buy in your grocery basket. That is a

interesting difference a leb

tarn versus a communist

lefty. There is no such thing

being a lib tiran lefty,

no-one argues we need to

change the tax system that's

the problem and it is the

Abbott government has balls

if they come to power it's

the one thing they could fix

and improve and actually change the course of

nature. They will not do

that. I hope they do because

otherwise you will have taxes

based around what we have got at the moment the boom

industries, the mining tax

will be fine. And carbon tax

in. He won't leave the carbon

tax in. He will. Seriously. This is the most... There is no chance he will leave the carbon tax

in place. We have only one

minute on program but Dee,

let's have a bet, we have

already got the shaved head

bet. I am not shaving my head

for anyone. He will refer it

to a committee or he will

change it slightly, amend it

slightly but he will leave it in. He will dump it non-parole The party will

kill him if he kept it. Of

course he will dump it it is

his own raison Detra. I don't

think he will dump it. We are

out of time. It the perfect excuse he can blame

everything on the carbon tax

for the left of history. You

guys are lucky I'm not I will

have to listen to this once

we are air. We are out of

time. We appreciate you

joining us on this and thank you very much for your

company as well. We will be

hear at the same time again

next week, be sure andtown in

to Australian Agenda on Sunday morning we will have

Sophie Mirabella joining us

live in the studio and the

panel after that to discuss

the week that was will be

Mark Latham and John Hewson,

should be a good one. See you then. Live Captioning by Ai-Media