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This is PM Agenda.Good afternoon, welcome to the program. Well, good news for home buyers and businesses this afternoon with the widely anticipated interest rate cut from the Reserve Bank delivered, down from 3.25 to 3%, the official cash rate. Whether the big banks will pass on all of this quarter of a per cent cut we will wait to see. We have seen one of the smaller lenders ING Direct pass on the full amount, the Bank of Queensland passing on part of it. Coming up we will explain what this rate cut if it is all passed on will mean for you depending on the size of your mortgage, how much are you going to save. We will look at the sharply different political reaction to this rate cut. According to the Government this is great news, showing that home buyers are now $5000 a year better off on the average mortgage. Than they were when the Howard government was in office. According to the opposition a very different interpretation on this. Clearly a sign that says Joe Hockey the Reserve Bank is worried about the direction of the Australian economy and so should the Government be. We will be talking to Finance Minister Penny Wong this afternoon, also the shadow treasurer, Joe Hockey. We will get both sides on what this interest rate cut means, where the Australian economy is headed. We will look at an interesting speech delivered today by Labor elder statesman John Faulkner, Senator Faulkner has issued a call for urgent action to deliver more transparency and integrity in the system. He is talking about stronger whistleblowing laws, a Code of Conduct for MP, tighter funding laws and significant reforms on how the Labor Party works in light of the scandal we have seen surrounding alleged corruption on the part of a couple of former Ministers in NSW, John Faulkner has called for sweeping changes in how the Labor faert works to break down the faction system. We will get reaction to that this afternoon as well from ALP NSW secretary Sam Dastiari. The top stories. Hello everyone, the RBA has officially cut interest rates by a quart kwarlter of a per cent in a move widely predicted by markets, it takes rates to 3%, once again the waiting game is on to see how the big banks will respond. Joining us for more analysis is Kate Williams from the Sky News Business channel. Kate, good afternoon to you. What's the reaction been like this afternoon? We have had cheers from retailers, also mortgage holders this afternoon. This quarter of a per cent cut should mean consummers are freer with their cash in the leadup to Christmas. They've been keeping it in their back pocket until now. Providing savings of $600 a month from an average mortgage of about $300000 all together. Now the treasurer said this will come as welcome news to families in the leadup to Christmas.This rate cut is a consequence of prup dent budget management, and contained inflation. Giving the -- prudent. Giving the Reserve Bank the things it needs to respond to events in the economy. The treasurer there explaining how this will come as a welcome development to home owners there. Do we have any idea when and if the big banks will pass on this cut? Well, at the moment we know that the Bank of Queensland has been the first to respond. We have seen them cut by 20 basis points not the full 25, ING has been close to follow, they've passed on the full 25 basis point cuts. No movement yet from the big four. We know they hate being hinged to the RBA calls like this. In fact ANZ has gone to the length of setting an interest rate decision time once every fortnight so they're not so reliant on what consumers and mortgage holders think around this time of the month. Certainly no move from the big four. We will be waiting and watching. As you well know this move was widely tipped by so many economists, equally as predictable, though, has been criticism coming from the opposition? Absolutely, Joe Hockey really reminding us of why we got this rate cut in the first place, the weak deluge of data, lower wages, and lacklustre consumer spending. Wages are falling in Australia, the last time that occurred was when interest rates were also at 3%. The bottom line here is Wayne Swan doesn't understand what is happening in the Australian economy. He doesn't understand that all the major data series are indicating that the the Australian economy is underperforming. The cash rate sitting at a record low of 3%, we could see 2.5% next year. Wouldn't that be be nice. World leaders have congratulated the Duke and came came on news they are expecting their first child, St James Palace made the announcement after Princess Kate was admitted with severe morning sickness. He was delighted, he and wife Kate are expecting their first child. A matter of days since we last saw Kate making a trip to her former school on Friday, the expecting Duchess was hardly taking it easy. The royal baby rumour has been in full swing for a months hitting a peak as the couple visited Cambridge. Mum to be kats had babies on her mind and William received a slogan bearing daddy's little pilot. They were forced to announce the news well before the 12 week mark. Kate was suffering from acute morning singness and admitted to hospital. The couple had been spending the weekend with the Middleton family, as Kate continued to be unwell William decided to drive her to hospital. The couple has made no secret of their desire to have a family, broechg the subject even on the day of their engagement was announced. I think we have take it one step at a time get over the marriage bit then look at the kids. Obviously we want a family. We will have to start think being that. Just like news of their engagement it seems the families again found out only at the last minute. If Prince Charles knew he was soon to be a grandfather he gave nothing away in a visit to flood stricken village. The politicians among the first to be told the news. I'm delighted for them, they'll make absolutely brilliant parents, everyone around the country will be celebrating with them tonight. Did you know before the rest of us? I had a note in I a meeting I was having, I found it difficult to keep it to myself. The news travelled quickly across the pond. On above of everyone here in the White House beginning with the President and the First Lady we extend our congratulations to the Duke and Duchess of Cambridge on the welcome news this morning out of London that they are expecting their first child. The prince is Holding the baby looking very pleased Princess Di an app smiling looking simply radiant. What is clear is baby Cambridge will be born into a different world to the one the Duke was born into. Media Saffy William and Kate are used to the attention. And they have chosen to announce their news their way. Because this is a very different world, whether their child is a boy or a girl, they will be the future monarch. Paul Harrison, Sky News. Fire cruise are on high alert across Queensland this afternoon with dozens of fires burning into heat wave conditions. Temperatures around 40 degrees have hit many parts of the state. Sky News Brisbane reporter Joel Fhilp is out braving the Heat. The sweltering conditions in Brisbane were used by many as an opportunity to visit Southbank to go swimming in pools along side the river with a view of the city. In the meantime the higher temperature and lower humidity had authority concerned. Paramedics were on call as a southeast copped irregularly warm conditions and fire cruise battled up towards of 50 fires across Queensland. Luckily despite a few blazes burning in inaccessible tore rain these fires were kept within containment lines. Tomorrow will bring temperatures of a more reasonable 33 degrees in Brisbane, the dry air mass moving west off the continent will prove to be a different heat than today. Sky News in Brisbane. Fire authorities in WA have upgraded a bushfire warning for a fire burning on the state's south coast. Michael hop kin, where is the fire this hour? Yes, hello Vanessa, the fire is burning still insield containment lines, burned through 111000 hectares so far since it started on Thursday. Most of that inside the Fitzgerald River National park on the south coast of WA. A AXA lert was issued, because of an expected weather change today and tomorrow. We're expecting a mix of North easterly swinging to northwesterly tomorrow that could put pressure on the lines. If the fire breaks through those it would bear down pretty quickly on the town of Bremmer Bay. The area of Point Henri a sub dwiegs on an isolated headland. It is undefendable. It hasn't happened yet. They are urged to take the safe och and leave unless they have a well prepared plan to defend their homes. They have been given a raping of options staying with friends or sports clubs that have been transformed into refuge centres, residents kept well abreast of which roads are opened and closed. Thanks Michael. A 17 year-old Queensland boy celebrating schoolies in Fiji has died. Harrison Kadell, vice captain of his Brisbane high school drowned in the pool of a resort on plantation island. It's believed the team was involved in underwater breath dares when something went tragically wrong. The news of his death comes as a shock to his school and community. It's a terrible loss for our community. Harrison was such a nine young man, so he well connected to our college community. We're a small community, a connected community, and this loss has certainly hit us very very hard. Harrison was our college vice captain, an outstanding athlete involved in many activities at the college. A Fiji spokesperson said around 500 schoolies are staying on the island Holding nightly parties number 5am. In sport, new Waratahs recruit Israel Folau said he never made a promise to play in the NRL at Parramatta. The Waratahs unveiled Folau the former NRL and AFL player insists he has nothing to hide. Like I said in the press conference, from the time that I left the Giants, all my options were open, rugby league or union. There were no promises at all. What we're against is having some type of legal versus union debate, Waratahs versus Parramatta. The way things have gone down. Folau said money wasn't the reason he ended up at the Tahs. If I'm in for the money I could have stayed in AFL and played out the next two years I had with them. I walked away from that deal there was nothing that was secured for me in the future, that was ready, so for me it wasn't about that.Taking a quick look at 9 weather for tomorrow, hot and stormy in the west and North, brisk winds easing in the southeast. 12 minutes past 4 eastern daylight. Back to David Speers in Canberra as PM Agenda continues. Thank you, after the break we will look at this interest rate cut this afternoon. What does it tell us about the state of the economy?

P You're watching PM Agenda. Wasn't exactly a great surprise welcomed nonetheless by home buyers and businesses, the Reserve Bank this afternoon cut the official cash rate by a quarter of a per cent taking it down to 3%. Described by Wayne Swan as an emergency level interest rate. What will it mean for you? That will depend on how much the banks pass on. We are yet to see the big banks move as of this time of the afternoon. A small of small lenders have, ING Direct has passed on the whole lot, the bank of Queensland only part of it .2 of a%. If you have a mortgage of $250000 you will save $39 a month should this all be passed on, that increases to $78 a month if you have a mortgage of half a million dollars. The political reaction has been quite different from the two sides of politics, first treasurer Wayne Swan going to that issue of how much home buyers are saving. Now, we understand not everybody out there in business or out there at home is on easy street, but having much lower interest rates than we have had particularly under the Liberal Party is a big win for Aussie families, particularly around Christmas time. Today's cut means a family with a $300000 mortgage will be paying around $5000 a year less than the Liberal saddled them with when they were last in government. In other words, Australian families are saving $100 every week compared to the high interest rates that we saw when the Liberal were last in office. Now, $5000 is a lot of money. And of course it makes a pretty big difference when you're trying to put food on the table.Well, let's look at what the Reserve Bank actually said in its statement. Firstly it talked about the global economic outlook. It said "risks to the outlook are still seen to be on the down side largely as a result of the situation in Europe, so the uncertainty over the course of US fiscal policy also weighing on sentiment" all about the fiscal cliff that American politicians are struggling to avoid as they try and find agreement on spending cuts and tax increases. The Reserve Bank says:

says: We have seen weakness in the economic data, the Joe Hockey was more concerned about what today's interest rate means. Clearly the Reserve Bank is trying to catch a falling Australian economy. Clearly the Government has no plan to deal with the deterioration in the nonmining sector, in the Australian economy.The Reserve Bank has dropped interest rates to emergency levels, not because the Australian economy is doing well, but because the Australian economy is facing huge challenges.We will be talking to the shadow treasurer Joe Hockey later. I'm joined by Finance Minister Penny Wong, thanks for your time. Good to be with you. The Reserve Bank doesn't cut rates to emergency lows if everything is fine with the economy? Let's remember what the Reserve Bank has said. Let's remember a few of the facts. Relative to other countries Australia is doing very well, whilst of the course not everyone is on easy street, we know that we are projected to grow faster than any of the major advanced economies. We have relatively low unemployment, we have got low interest rates contained inflation, a lot of investment. Solid growth, so these are all good things. I don't think it's good for the country to have people like Mr Hockey trying to put down the economy. Why does the Reserve Bank have to cut rates to emergency lows? Go to their statement. And the comments that the extract said they put in the statement they referenced a few things, " the global economy "it's true, it has been much more fragile than you would have hoped. Is the fiscal cliff in the US a worry for you? There is what is happening in Europe, the fiscal cliff. We look forward to that being resolved as does the rest of the world. In the domestic economy there is some concerns? There are two points, the quote you read out Reserve Bank says the economy is going close to trend. Look ago head he was talking about over the past year, look ago head it has some certain? The second thing that the Reserve Bank said is public spending being constrained. In the face of Joe trying to make political hey out of an interest rate cut good for many people in Australia, we're in a different position to where the world was in 2009. Remember what happened in, the global economy started contracting. We had governments across the globe including the Australian Government putting stimulus into the economy, and interest rates obviously very low. It's a very different context to what we are seeing, solid growth in Australia, certainly risks in the global economy, relatively low unemployment and the Government being very disciplined in its spending. Do we need...It means we're in a different position. Do we still need to push back into surplus, given some of the concerns that are out there about the economy? Look, we have been very clear, you have the right economic settings for the time. Our latest budget update has us not only returning to surplus, as the Reserve Bank has referenced...Do you think it's the right thing to do? As the Reserve Bank has referenced the economy growing at or around trend. Can I talk about the future? It is important, you asked about it earlier. The Government is really clear that you do need to look ahead, to make sure you plan for the future, to make sure that beyond the peak of the resources boom we still continue to increase the country's wealth ensuring Australia's pros prosperity. What are you doing about the post mining boom? What we're doing is increasing Australia's productivity, invest in people, skills, our universities, investing in schools. We have done a lot of these things, we have substantially increased fund to go universities and the number of people going to university, question we have increased the number of available places...All of that investment seems to be at odds getting back into surplus. You have to make your priorities. There are other things to increase productivity, investment in the NBN, a long-term investment geno posed by those opposite, I think critical to the 21st century. Is it still a priority to get back into surplus? We have taken a lot of savings, something that I think the opposition seem to forget, that over the course of a number of budgets, we're in excess of $130 billion worth of savings...Still struggling to get back into surplus? If the revenue was at the level it wasn't under Peter Costello we would have a 25 billion surplus. The question is is it still a priority to get back into surplus? We have demonstrated the priorities. It is still a priority? Clear, the Government believes fiscal discipline is a priority. Can I ask you about the mining tax? The Reserve Bank points out that the peak in mining investment is approaching and the opposition is saying" get rid of the mining tax. "It's not just the opposition, there are calls for at least major changes to the mining tax from your own GST review, John Brumby and Nick Greiner who chaired it you have to fix the issue of represent funding state mining royalties. Will you do that? That review has been handed to the Government. The Government is considering the outcome of that review. I mean I'm always interested in the opposition's shifting position when it comes to mining...I'm not asking you about your position, will you look at that? Hang on, you renksed the opposition's position. I make one point. Initially remember this was going to be the worst thing in the world? It was going to stop the economy, it was going to be dreadful? Now they are saying, but the design is in the the right design. It hasn't raised any money, you have committed money to it. All the funding commitments are in the budget bottom line. Will you change the tax that refunds mining royalties? We have said we will consider the GST review recommendations that's the position. Is there a case for doing this? I'm not going to go any further what I've said, we are considering the recommendations. John Faulkner your colleague gave a speech I'm sure you would have read TI've been busy today but that's okay. He calls for action on a number of fronts, funding disclosure, whistleblowing protection, reform within the internal ALP. He is saying the entire party membership should choose Senate candidates, an internal panel to find candidates not factional dominated commitments. I greechltSenate candidates should be selected by the entire party, Senator Wong? I wouldn't mind that, you have to work there through the party process, people may have different views on that. The lek trorl funding disclosure laws will it happen before the election? Gary Gray has been dealing with that, he's probably the person you need to speak to you about that. We have a good record in terms of increasing transparency and disclosure. Finance Minister penny wong good to speak to you. On the other side of the break we will hear about the interest rate cuts from Joe Hockey.

electoral electoral

Time for a check of the news headlines, here is Vanessa Trezise.The RBA has delivered a pre-Christmas interest rate cut reducing it by a quarter of a percentage point to 3%. The lowest the cash rate has been since early October 2009 during the Global Financial Crisis. In a statement accompanying the decision RBA Governor Glen Stephens said global growth is expected to be below average because of the European debt crisis and the looming US fiscal cliff. The Duchess of Cambridge is expected to be in hospital for the next few days she's been admitted suffering from severe morning sickness, the royal couple are expecting their first baby, both the Royal family and the Middleton family have expressed their delight at the news. Julia Gillard has joined world leaders including Barack Obama and David Cameron in congratulating Prince William and Catherine. The Department of Foreign Affairs has confirmed a 17 year-old male have Queensland has died in Fiji. The incident occurred on Plantation Island, an area popular with schoolies. Harrison Kadell drowned in a resort pool at a hotel where around 500 schoolies are staying. It's believed the teen was involved in under water breath dares when something went tragically wrong. He's been described as an excellent role model and an outstanding young man. Firefighters and paramedics are on high alert in Southeast Queensland as the region is hit by extreme temperatures, temperatures around 40 degrees have hit many parts of the state as it struggles through one of the hottest December days in more than 10 years, the fire danger alert has been upgreat today extreme with more than 30 blazes now burning across the state. The Heat wave is expected to end on Thursday. US president Barack Obama has issued a direct warning to Syrian President Bashar al-Assad about the use of chemical weapons. In a speech on nuclear nonproliferation at the National diverse university in Washington, Barack Obama detailed the stance on chemical weapons, reports emerged that Syria has started mixing chemicals that is used to make the deadly Sarin gas, the US has withdrawn nonessential staff from the war torn nation. To sport, Israel Folau said he never made a promise to pay for Parramatta. The normer NRL and #568 AFL player said that mun yah wasn't the reason he ended up at the Tahs. Brisk showery winds easing in the southeast. Vanessa thank you, we have heard the Government's take on today's interest rate cuts from the Reserve Bank. Now for the opposition, I spoke a short while ago to the shadow treasurer, Joe Hockey.Shadow treasurer, Joe Hockey, welcome to the program, a as the Government points out families are now on average with an average mortgage $5000 a year better off in terms of interest payments. And the last time the coalition was in government. Is Labor now the party of low interest rates? Well, David that's a leading question. I won't accept it, because the last time interest rates, cash rates were at 3% wages fell and this time, now the Reserve Bank has dropped the cash rate to 3% in the last quarter wages fellas well. So the bottom line is that people are getting this cut and the cash rate from the Reserve Bank, not because the economy is doing well, but because the economy is facing big challenges. But families are better off in terms of their interest rates payments, aren't they? If they can afford the loans, if they can afford to repay the loans. There's a whole lot of factors going into play, David, not just one input. The bottom line is the Reserve Bank is cutting interest rates to catch a falling Australian economy. They're not cutting interest rates because the economy is doing so well. If you actually have a look at the data series released over the last two months it is patently clear that the Reserve Bank is trying to catch the nonmining sector of the Australian economy, to try and shore that up, because the Government isn't lifting a finger. So there's nothing to celebrate for families today in saving more money on their interest rate bill? Of course there is, of course there is, of course it is going to help families to have a reduction in interest rates, but what matters for the Australian economy is that they keep their jobs, that they keep income coming into the house, that they have increases in real wages. That's what matters, David. For the Government to Crowe this is a great tick of approval for their economic management completely inNorse the fact that the Reserve Bank has today cut interest rates to emergency levels. The emergency levels of Wayne Swan described in September of 2009. Now, Reserve Bank says in its statement that the peak in resource investment is approaching some would say it has already passed. What do you put this down to? Well, there's a combination of factors. Obviously you've got China not having the same level of expenditure on capital investment that it had previously and therefore the demand for our resources, and the price that is paid for our resources is not what was expected. Clearly as numerous mining executives have said on numerous occasions, the cost of investment in mining in Australia has become prohibitive in a number of areas. Part of that has been the uncertainty surrounding the mining tax. There's no argument about that. And I might add the carbon tax, because the carbon tax applies to mining projects as well. So the bottom line is the Government's policies are making life harder and not easier for mining companies in Australia. If the coalition wins the election and gets rid of the carbon tax and the mining tax will we see an increase in mining investment? Can you give us any assurance on that? Certainly the feedback from mining companies is that the carbon tax and the mining tax make life more difficult in Australia. It is harder to convince investors to contribute to major projects in Australia with with the sort of regulatory and political uncertainty. One of the data series that came out was the deloit CFO survey which said 66% of surveyed CFOs, that is company financial officers, financial directors, surveyed, indicated Federal Government policy uncertainty was having a negative impact on sentiments. Getting rid of it will increase confidence? Getting rid of taxes increases confidence and confidence leads to investment. I gave a speech about that about how do we get back to people taking calculated risk? If you have businesses prepared to invest, businesses prepared to take calculated risks you're going to have innovation, you're going to have investment, going to have jobs and you're going to have reward. Well, in that speech, again today you have argued the case for cutting government spending. In light of the sort of weakness in the economy that you have raised here today is now the time to be cutting spending, to be driving the budget back into surplus? Oh absolutely. You have to drive the budget back to surplus, it is the only handbrake on Labor. The only handbrake on their waste. Lord knows ever day we hear of more waste, whether it be at a smaller level such as the internet filter costing millions of dollars, or be it at a larger level, $900 dollar cheques to dead people or building the education revolution as it was called, where billions of dollars was over spent, mate, these guys are addicted to wasteful spending. Isn't cutting spending also a handbrake on growth which is pretty important right now? It depends how you cut the spending where you cut the spending. The bottom line is this government is randomly cutting expenditure in areas without having a plan, no economic plan, no fiscal plan, that's why it has no taxation plan. Only the Government could put $15 billion worth of expenditure against a mining tax that hardly raises $1. Now, if you want to know where there is reckless spending then I would say to you that one example where the Government has got it wrong was introducing a school kids bonus paid for by nonexistent mining tax, the school kids bonus is funded by the mining tax that hardly raises $1, so it means that our school children are getting money that has been borrowed from them as future wage earners, that just illustrates the fact this government doesn't get you have to live within your means. Finally, Joe Hockey, when we talk about spending can I ask you about the National Disability Insurance Scheme. We know the coalition is committed to this. Are you fully committed to this? Can we afford it? We have said you've got to have good strong surpluses to be able to pay for it. The bottom line is the Government hasn't got good strong surpluses. I seriously doubt it will have a fair dinkum surplus, so ultimately the Government is going to be borrowing money to pay for this. Ultimately Australians will see that as unsustainable. What about the coalition? Will it only happen under the coalition once we are back into surplus? Only the coalition will deliver a full National Disability Insurance Scheme, only the coalition will deliver real reform in education, we're the only ones who can pay for it, David. Will it only happen once the budget is back into a healthy surplus? That's what we have said. The Government needs to show us how it's going to get the budget back to healthy surplus. You will see all the details of our plan in the leadup to the next election. I'm wondering about the timing of this National Disability Insurance Scheme, is it hostage to getting the budget back into surplus? From our perspective it shouldn't be, because the Government said it is forecasting a surplus. If the Government is forecasting surpluses...You say that's rubbish, you can't believe the Government on that. I probably will be proven right. What happens with the coalition, when do we get any idea? You know what David from my perspective, you're inviting me to speculate on what the budget is going to look like in 12 months now. I'm asking you about what your principal is...No, you are. potential treasurer to pay for an NDIS if we're in a deaf fit still? We're not going to make commitments we cannot afford to pay for. Does that mean we will get an NDIS or not? Under us you'll get a full NDIS when we can afford it. Australia at the moment cannot afford it, the Government has committed $1 billion out of even an initial $3.9 billion, after that it's estimated to be $8 billion a year which for a household on $67 a year is an extra $1000 of tax per year. Under the coalition it could be a way off is the point I'm getting at? That's your commentary, I don't accept that. I accept that we have got to get...When will it be? You tell me what the budget numbers are, David, I'll tell when you we did deliver an NDIS. All I'm asking we have to wait until we're in surplus to get it? In strong surplus. In strong surplus before we get an NDIS? It has to be the same under Labor they can't afford it. We have cleared that up a little. Joe Hockey, shadow treasurer, thanks for joining us. Thaul very much. We have heard from both sides of politics what this interest rate cut means, let's cut through the spin have a look at this Paul Kelly, editor at large at 'The Australian' newspaper joins us. Paul, different views about the interest rate cut tells us about the economy, what is going on? What it tells us, David, the Reserve Bank is concerned about the economy. It thinks the risks are on the down side domestically and globally, so therefore it's given us another interest rate cut. The Gillard government needed this decision, it was hoping to get it, and I think it needed the decision in both economic and in political terms. The bank clearly feels that there are risks to ongoing growth and this is important for the Government. The worst thing the Government could face in an election year next year is rising unemployment, steadily rising unemployment during the course of the year. That would be a nightmare scenario, it is the great risk. Of course the other great risk is the Government might not be able to get to that budget surplus. Just picking up on what you've said there, in theory a rate cut should do a couple of things, downward pressure on the dollar and more cash in people's pockets to spend. Most of those things should help to deliver a surplus, is it really now unachievable? I think it is too early to say that, David. The Government wants to get to this surplus, but it looks as though it's getting more and more difficult all the time. I think the Government's got to monitor this particularly carefully, and if it can't achieve the surplus it's got to work out how it explains that to the people, how it puts that on the table without it appears to be an economy failure, which of course it would be. -- economic failure. Looking at the election year we are going to see a central debate over the economy. If we are seeing a slowdown in things like the labour market in terms of rising unemployment rate, how is this going to play out politically? This will just be bad news for the Government? Are there risks here for the coalition too? Look, I think one of the great success stories of both the Rudd and Gillard government has been the unemployment rate, and we got through the Global Financial Crisis without any recession, we have had the resources boom, but the economy overall has been Holding up pretty well, particularly when it comes to unemployment, but there are now some significant warning signs on that front, and I think it would be very difficult for both Julia Gillard and Wayne Swan if we did see rising unemployment levels during the election year. I've got no doubt at all. You can imagine what Tony Abbott and Joe Hockey would in fact do with that.Let's look at what is happening right now. This week's COAG summit happening on Friday, the final meeting for the year of federal and state leaders, Julia Gillard has put electricity market reform at the centre for this week's meeting. What do you think of the plan she's put on the table? And her chances of success here? well, this is another example of the Prime Minister's very aggressive attitude towards the States. It's Dell signed again to ease the pressure on the carbon tax, it's a fresh initiative from the Prime Minister in the electricity area, there's no doubt that reform is needed, but I think there will be a lot of reluctance when it comes to the States in this area. I think they won't easily roll over for what the Prime Minister wants.Well, we will look forward to your analysis after that COAG summit over the weekend, Paul Kelly thanks for joining us. Thanks David. We will look at a reform of a different kind, John Faulkner has called for a number of reform areas to be pursued before we hit the election towards the end of next year. Electoral funding whistleblower protections and looking within the Labor Party outlining sweeping changes he wants to see. We will show you what they are and get reaction from the head of the Labor Party in NSW its again secretary Sam Dastyari. general secretary Sam Dastyari.

P Labour Senator John Faulkner has variously been described at times as the conscience of the Labor Party, the elder statesman of the Labor Party, one thing that is undisputable he has long championed the cause of greater integrity. Today he gave a speech in Melbourne, he put forward a number of areas that he believes need to be pursued urgently, certain before next year's election, amongst them whistleblower protection, we have seen this government move on this front. John Faulkner said" current provisions related to whistleblowing are limit the and inadequate, an improved legislate tif framework is desperately needed now. "On the issue a Code of Conduct in MPs, one thing that was greed to by the independents in forming government, John Faulkner says:

Again he wants action on this before the election. Then on the issue of electoral funding, something he has long championed action on was defeat ed in the first term of the government, putting reforms in knocked off by the coalition John Faulkner says: Talking about reducing the threshold at which donations to political parties have to be disclosed. Most interesting is what John Faulkner had to say in the speech today about his own party. In the wake of the Icac inquiry in NSW where we have seen scandalous allegations of serious corruption on the part of two former NSW Ministers allegedly, John Faulkner's put forward a number of changes. He said:

In particular he's saying an independent body should handle disputes in the party over pre-selection rather than the committees dominated by faction shons, he said all members of the parties should have a say in pre-selecting Senate candidates or upper house candidates in NSW. The factional bonds that tie MPs to vote a certain way should go. MPs should be entitled regardless of the faction to vote their own way in caulk kas, this among other changes put forward today to rid the Labor Party of what he sees as an endemic problem, that it's suffered for too long with this factional control. To look at some of these changes, whether they're likely to be pursued I'm joined by the general secretary of the NSW ALP Sam Dastyari thanks for your time. Thanks for having me. Is John right? A lot of what John's outlined today is a detailed considered sensible reform ideas for the Labor Party. The Labor Party had ignore it at their own peril. John has been going on about this for a while. He's spot on. The big theme from what John was saying today we just cannot go on with politics as usual, politics in this State and politics in the Labor Party has to change.He didn't weigh too much in detail about the issue surrounding Eddie Obeid in NSW. Some of this clearly is a reaction to the scandalous stuff we are hearing about what is happening? Of course it is David. I mean I'm lucky in my job I get to talk to a lot of different party members, they're appalled about what they are hearing coming out of ICAC every day, everybody is en entitled to due process, there is a legal process gone through at the moment we have to respect that. People are appalled by what they are hearing, what John is saying you cannot have a political party where decisions are made by a small handful of people. Are these issues in NSW going to see Labor hammered in Sydney in particular, come the Federal election, do you think? Look, I think there are bigger challenges for the party we have to face over a long period of time. I think we make a is mistake when we only consider the short-term. By point is this the NSW Labor Party is a long running beast, we are reforming ourselves, the reforms should happen, some of them will happen, but in terms of the short-term David I think we make a mistake when can he make too many decisions based on the immediate solution, we need to start thinking beyond that. ? Looking specifically about what John Faulkner put forward, an independent body to handle internal disputes rather than the current committees that do deal with the various disputes within the Labor Party. You're the general secretary of the NSW party, will you make that happen? Look, it's not my decision alone to make, obviously I'm secretary of the party there's a process and conferences to go through. It's no surprise that I've had a couple of reform ideas of my own that have been very controversial in the Labor Party. Some of them have got up and some defeated. Where does this go now? This is a debate we have to have in the party and have to have in NSW. John's contribution is a strong one, it's a sensible suggestion, I think it's a suggestion worth being looked at. The one I'm kind of interested in not just the one about the party committees, because we get ourselves caught up in the inturms a lot. Also how the kau sus process works. I wrote a controversial OP ED piece two years ago saying we should end factions in the parliamentary party, factions shouldn't be kmeeting, that's a sensible reform, a position I have held for a long time. I think - look, I think the Labor Party itself, the big message out of this has to be the challenge facing us is really reform or die. The Labor Party has to change it, has to reform, it has to be prepared to embrace big ideas.All right, well Sam Dastyari at least we have one supporter there of some of the changes John Faulkner is saying, see where they go from here thanks. Thanks for having me. All we have time in today's program, we will have more reaction on that no doubt, the speech only given this afternoon by John Faulkner, Penny Wong says she supports at least part of what he says, parties to reselect who is going to send for the Senate rather than a small group of power brokers, more on that later and the interest rate decision, we are waiting to see what the big banks are doing. How much will they pass on. Stay with us after the break for the very latest Sky News.

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