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Final election forum -

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TONY JONES, PRESENTER: To assess the performance of the leaders in the final debate of this campaign, we're joined now in our Sydney studio by former West Australian Premier Geoff Gallop and in Melbourne by the former president of the Victorian Liberals, Michael Kroger.

Thanks to both of you for being here. And let's start by asking whether either of you think tonight's debate is actually gonna change the minds of any voters. Geoff Gallop, you first.

GEOFF GALLOP, FORMER WA PREMIER: Well I think there's still an unresolved question in this election that relates to the budget strategy that the Liberals are going to adopt and what it will mean for the economy and what it'll mean for services. So in a sense, Kevin Rudd did focus on that two or three times in the debate, so in that sense I think he's focusing on one of the important issues that gives him a chance in the last weeks of the campaign.

TONY JONES: But do you think though that this debate will really change the way voters are thinking? First of all, not a huge number of people will have seen it; secondly, a lot of people have locked their votes in. That's pretty clear.

GEOFF GALLOP: That's true. But I think the only hope Labor has is to really push hard on this budget question and what it represents in terms of social philosophy, what it represents in terms of consistency. It wasn't so long ago the Liberal opposition were saying that we had to go back to surplus and do it very quickly. Now they're saying that would be irresponsible. So I think that is the issue for Labor and I thought Kevin Rudd got that across quite well alongside his critique of the parental leave scheme, which of course is unaffordable.

TONY JONES: Michael Kroger, what do you think? And go back to the initial question first of all, which is whether this particular debate will change anyone's minds. The worm gave it marginally to Kevin Rudd, the pundits too, but mostly they're saying it won't change the momentum.

MICHAEL KROGER, FMR PRESIDENT, VICTORIAN LIBERAL PARTY: No, the answer to your question is no. But, look, Geoff wants to talk about the budget and the situation in relation to the economy. Well let's talk about it, Geoff. Answer me this question, since you're a senior Labor figure: how are you proposing to pay off the $300 billion worth of debt your government's run up?

GEOFF GALLOP: Well first of all, I think the Labor government has a much more progressive attitude to taxation. They've started to deal with this question of middle class welfare, which is going to return under the Abbott Government. We've already seen it with the parental leave scheme. They have a mining tax in place. They're serious about the revenue you need for the sort of economy and society we're going to have. On the other side of the equation, I think there's an aspiration to go to low debt, but that's been put off in the short-term, which leads one to wonder what does this opposition represent? Is it a government Abbott-type opposition that wants to spend money, as Peter Costello said, or is it a small government, Liberal opposition that when it gets into power - there's confusion on this and I think Labor are perfectly correct in making that an issue for the public.

TONY JONES: Michael Kroger, go ahead.

MICHAEL KROGER: Yeah, but Geoff, I hear all that, but have you got any idea how you're gonna pay off the debt?

GEOFF GALLOP: Well I've just said ...

TONY JONES: Michael, it's probably best we don't try and engage in a Melbourne-based interview. You've got an interviewer here in the middle. Let's hear what you think about ...

MICHAEL KROGER: And a very good one, Tony. According to Clive Palmer, the best interviewer in Australia. God bless ya, Tony.

TONY JONES: It's the such a relief to have someone say that every day. Thank you very much. But let's go to the actual question here. I mean, clearly Kevin Rudd is focusing on this costing issue, the issue of the cuts every time he gets the opportunity. Now Labor must be hearing back in focus groups that people are worried about this. It could be the last remaining worry they have about the Coalition. Why not just simply answer it, get all the costings out there, release all the details which are not so far being released?

MICHAEL KROGER: Yeah, we know the answer to that because they haven't finished all - released all the policies, but they made a big step forward with that today. I've gotta say this is not strong territory for Labor, and if this is all they've got, they are in very serious trouble because every time Rudd talks about the economy, his ratings go down because it reminds people of what a disastrous record Rudd has as Prime Minister and as an economic manager. You know, 10 of the last 11 Liberal budgets were surpluses. 11 of the last 11 Labor budgets have been deficits. So this an issue this guy has gotta get off. He's gotta stop talking about debt and deficit and when he talked about the $70 billion worth of cuts tonight, God, it rang hollow, Tony. It really rang hollow. So it shows you what little he's got to talk about when he has to concentrate on that issue.

TONY JONES: Well, that particular figure certainly did ring hollow because it's been fact-checked left, right and centre by just about every fact-checking operation and it's not correct. It is correct, however, that several senior Liberal figures have mentioned that figure in the past. But now we're getting down to the real figures, and yet Joe Hockey today refused to release the Parliamentary Budget Office details. He's saying trust the three authorities that we've put in place. That's not enough for a lot of people. What do you think?

MICHAEL KROGER: Well I think it's gonna be released next week. But, look, here's the fundamental point: what the electorate have heard from Rudd is $70 billion. Peter Beattie was on a television program on Sunday and kept referring to $53 billion. Rudd was back today at $70 billion. As you said, this has been checked and proven to be completely false. And when Hockey came out today with the cuts and savings that he's making, people just, you know, said, "Yep, fair enough." I mean, no-one sort of thought this was terrible. There are no cuts to Health, no cuts to Education, no cuts to Defence, no cuts to medical research. As I said, if this is all Rudd's got, he is going to lose this election. But Kevin Rudd was only strong in '07 and '08 when he had no record to defend and a blank cheque to write for big massive programs which made him sound incredibly visionary. Now with an appalling record and $300 billion of debt which Geoff has no idea how they're gonna pay it off, clearly, this man is looking very, very hollow and shallow and he looks like he's headed for a catastrophic defeat unless he can do something dramatic in the last nine days.

TONY JONES: And Geoff Gallop.

GEOFF GALLOP: Look, I think in answer to Michael's point about this election and what it represents, we can look at three fundamental issues: attitude to the NBN, whether there's real commitment to getting that NBN to into the home and not down to the end of the street. Secondly, a real commitment to social justice in Health and Education and I think Labor has got the runs on the board and has got a strategy in place to deal with that. And most importantly I think concern for the environment. Now, Labor hasn't pushed this issue in the election campaign, but I think it is an important issue and they have a clearly different position from that of the Liberal Party. If we're going to look into the future in the new world we live in, not John Howard's world of the late 1990s, early 2000s, no that world, that world's gone. We're in a new world now. It's tougher, it's more competitive. We've got to develop new industry for Australia to cope. And I see in the Liberal Party a desire to go back to a world that's no longer existing - that's John Howard's Australia. And so I think there are big issues in this election and the budget issue ...

TONY JONES: But you're talking in a sense more about the big issues than Labor is. They're advertising campaign and the thrust of their negative campaign is all about this costings and cuts issue. Now ...

GEOFF GALLOP: Well you've asked me.

TONY JONES: That's true.

GEOFF GALLOP: I'm not here as a representative of the Labor Party.

TONY JONES: But I'm also asking you to assess how they're going in selling these big picture stories.

GEOFF GALLOP: Well, I mean, everything one knows that they carry enormous baggage into the election campaign. Two leaders, a number of leadership challenges, and secondly of course a number of deviations on fundamental policy. That is a problem for them. But that being said, Tony, we can't avoid discussing important issues for the future of Australia. And as a person who's been involved in politics on the Labor side and have been watching politics since retiring, I have a lot more confidence that within the heart of the Labor movement and the Labor Party is a desire to deal with these issues. In the heart of the Liberal Party is complacency about Australia and its position in the world. I don't want to go back to that complacency.

TONY JONES: OK. Just before I go back to Michael Kroger though, because you actually started by talking about the Coalition's cuts and costings, etc. being a critical, fundamental issue. But if Tony Abbott was given the chance there because Kevin Rudd kept harping on about this and he said - in fact he used the old Ronald Reagan line of, "There he goes again." And he went on then to deliver what was a pretty good line from him, which is, "I'm determined to under-promise and over-deliver." Now if that line gets out there, where's Kevin Rudd left?

GEOFF GALLOP: Well I think you've got to look at the two budget strategies; how they're going to deal with the budget and when they're going to deal with the budget. Labor said both. They've said how. They've outlined all of their cuts which came through from the last report from Treasury which indicated revenue was going down. They've said that they're aiming for 2016 and '17. And you can compare their program with the Liberal program. It's a very big issue because what the Liberals are doing is going back to the John Howard era of middle class welfare, unaffordable in terms of the long-term future of our country, unfair for many of our citizens because of the opportunity costs involved.

TONY JONES: Alright. Let's go back to Michael Kroger on that point, and I'll just say one other thing that's being talked about by the Labor Party, by Kevin Rudd in particular and that is the commission of audit. They're now making the comparison with Queensland, trying to make the Campbell Newman case that cuts were not foreseen when people voted for him.

MICHAEL KROGER: Look, first of all Geoff got it right: he said this government has enormous baggage. And he said they've got fundamental deviations on policy, which was a nice way of saying something else, Geoffrey. But they are the two reasons why this government shouldn't be re-elected. It has a disastrous record ...

GEOFF GALLOP: But hang on, can I interrupt there, Tony, and ask Michael: what about the deviation in the Liberal Party on the budget strategy? A fundamental deviation from saying we have to go back to surplus because we've got a crisis and now saying we're putting it off into the never never. That's pretty fundamental.

MICHAEL KROGER: No, Geoff, you're absolutely right there. Did you notice in passing the budget update figures, which were $33 billion out from the prediction? Did you notice Penny Wong was ...

GEOFF GALLOP: Well of course, Treasury ...

MICHAEL KROGER: Hang on. Stop interrupting all night. Did you notice Penny Wong's and Wayne Swan's '11-'12 budget and the forecast they made for the next four years, which are out by $106 billion. My God, Geoff, if these people were directors of companies issuing prospectus forecasts, they'd be facing charges because of their negligence.

GEOFF GALLOP: OK, Michael, let me ask you a question ...

MICHAEL KROGER: Don't you come in here - hang on, let me finish. Don't you come in here and say, "Oh, the fundamental change in policy." My God, mate, you've run up $300 billion of debt, $30 billion budget deficit and you say, "Oh, we've had a shift in policy." Well, what else do you do when you predict a $3 billion surplus and ended up with $30 billion of deficit? God forbid!

GEOFF GALLOP: Michael. Michael, Michael, it is the Opposition Leader that's making trust and credibility an issue. The fact that not so long ago he was saying we had a major budget crisis and we need to return to surplus quickly and now he's saying not, surely that raises a credibility issue that has to be addressed.

MICHAEL KROGER: The costings are fully funded.

GEOFF GALLOP: (Laughs) We haven't had all the costings yet, Michael! We haven't had them all! We haven't compared the costings from the three worthy people ...

TONY JONES: Hang on, hang on, hang on, you've got to let him actually respond.


MICHAEL KROGER: Let me assure you the Liberal Party's happy to debate the economy with you all day every day. It is the principle reason why Kevin Rudd will probably be defeated on Saturday week unless he can turn this ship around.

TONY JONES: Michael Kroger, let's go back to some actual policy, one of Kevin Rudd's more telling points. We talked earlier about Tony Abbott's telling points. One of Kevin Rudd's was on the funding of education reforms, the equity reforms commonly known as Gonski. Now, he made the point the Coalition is committing itself only to the next four years, not to the next six years out to 2020 where the policy really ramps up in terms of its cost. Now if you're gonna commit to those reforms, as it appeared that Tony Abbott had done, you have to commit on the long-term, don't you?

MICHAEL KROGER: Well he's being asked to commit beyond the forward estimates. And if Geoff Gallop or Kevin Rudd can explain where the extra $8 billion will come from to fund them as well as the NDIS as well as the NBN as well as all of the other programs, I'm sure Tony Abbott would be very happy to agree and Chris Pyne would be delighted to agree. But like all things, this is Walter Mitty land. This is Kevin Rudd dreaming of fantastic success and it's an illusion. We are in a budget crisis created by this Labor Party. You know, Geoff, what the Liberal Party dreams of? It's of coming into government one day where there's a budget surplus behind and we have surplus assets in the bank. What a remarkable thing that would be.


TONY JONES: So Michael, before I go back to Geoff, just to - just to bring you up on that point, the picture you paint is one that does seem to require a very high level of cuts in order to bring it back into surplus at some time in the future and of course we have seen expensive new policies introduced like the parental leave scheme. So do you think this government, if it - an Abbott government will have to cut seriously, big time?

MICHAEL KROGER: No, no, what they're going to do is grow the economy. And I know that sounds a really simplistic, pathetic piece of rhetoric, but you grow GDP, you grow the tax base. And that's fundamentally what the Opposition are trying to do when they get into government. But they've quarantined Health, they've quarantined Education, medical research and Defence and that has taken the entire air out of the tyres of Kevin Rudd's attack.

TONY JONES: That's a very good point, isn't it? I mean, they have quarantined so many areas, although looking into the future, you can't see where the big money for the - real big money for the education reforms are going to come from.

GEOFF GALLOP: Well, from my experience, I would say to all of the voters out there that are looking at this election, there are two ways you can look at a political party and its leaders. One is to look at the particular policies they put forward in a context of an election campaign, and second, look at what's in their gut. What do thNey believe in? Now in Labor's case, we really do believe in having this infrastructure in place. I remember in my time as Premier, the Howard Government had no interest in this new technology and Labor has put NBN on the agenda. Secondly, the drift to inequality in our society created by complacency about our education system, the role that private initiative should play as opposed to public support, the same thing happened in health. It's not in their gut, Tony. Nor is it in their gut to deal with climate change. And for these three reasons, whatever Tony Abbott might say now, when he's in government, the priorities will not be for the NBN, for social justice and for dealing with climate change. And that is a fundamental difference.

TONY JONES: OK. Alright. We're nearly out of time. Let me go back to Michael Kroger. Do you think Labor would do a lot better if they had someone actually expressing these kind of visions in the way that we're hearing expressed here by Geoff Gallop? Because mostly you don't get it expressed like that.

MICHAEL KROGER: No, because it would be like the Liberal Party coming out saying, "We want to abolish payroll tax. We want to increase employment in this country by returning $20 billion from the Commonwealth to the states to end payroll tax. We want a national disaster insurance scheme so people in the states who are afflicted by natural disasters for which they're not insured are recompensed by the Government." We'd love to announce these things, but Tony, there's one problem, and it's the reason the Whitlam Government have been stained ever since they left office, it's the reason Labor governments have been stained around the states because of their over-spending in the '80s: economic management matters, Geoff.

GEOFF GALLOP: Of course it matters!

MICHAEL KROGER: There is basically a bottom line. And the incompetence of this Rudd-Gillard Government and Swan and Penny Wong will stain this government for a generation.

TONY JONES: Alright. Time for a final comment because we're ...

GEOFF GALLOP: I'd love to know Michael's real views on the parental leave scheme and whether or not it's affordable for the people of Australia into the future.

MICHAEL KROGER: It's certainly affordable and it's fully funded, Geoff, and you know that.


TONY JONES: And in fact you did make that case last week, to be fair. So, Michael Kroger in Melbourne and Geoff Gallop in Sydney, thanks for a passionate, lively discussion on the back of that debate. Thank you.

GEOFF GALLOP: Thank you. Thanks, Mike.

MICHAEL KROGER: Thanks, Tony. Thanks, Geoff. Pleasure.