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It is 4 PM in Canberra at 1 PM in Perth. David Gilbert in the David Speers today. This is PM Agenda. Fire crews take advantage of milder conditions in New South Wales. There are predicted horror conditions tomorrow. The government moves to increase the debt ceiling in Australia to $500 billion as the Treasurer warns the current limit of $300 billion will be hit in December. The ACT government says it will defend its historic move to legalise same-sex marriage is legislation passes in Canberra today. This is PM Agenda, thank you the company. We are standing by to take you live to the role fire service headquarters. -- Rural Fire service. The Commissioner Shane Fitzsimmons will be with us soon. We were we With the latest now. Cooler conditions and slate rent have seen the fire emergency warnings it downgraded from now. There are still four watch and act alert for Springwood and Mount Victoria. And the whole road fire burning in the Southern Highlands. There are 14 of the fires uncontained. The rural Fire service will urge people in fire affected areas to remain

will urge people in fire affected
areas to remain vigilant as they will be extreme conditions tomorrow and hot and dry conditions. Many schools across the Blue Mountains because tomorrow as a precaution. The latest, head of this news conference since Fitzsimmons, we will go to our reporter at the fire services headquarters. A bit of respite today that all eyes today on the conditions of evening.That is right. Not long to go now until the next media briefing at the RFS headquarters. It has been cooler today. We are still seeing some light winds. Particularly with thunder and shows coming in from the west. A severe thunderstorm warning the central areas of New South Wales. There is a threat that those thunderstorms could have up to the western side of the range which could convert it things. So far no lightning strikes which was feared this afternoon. That could be a case a bit later that the RFS may have to deal with. Tomorrow is definitely the worst of the conditions strengthening winds. It will come in the middle of the day which is a double-edged sword, drop in temperatures but very dry a stream. The forecast is worse than expected. That is the latest applet. -- Update. We have high temperatures expected. Women action is the extreme fire danger raging. -- We may actually see extreme fire danger rating. There are literally thousands of firefighters and a lot of back burning overnight to strengthen containment lines. The latest update is 54 fires in New South Wales and 17 of those are currently uncontained. Earlier at had emergency warning for the State Mine fire lifted down to watch and act. There are four watch and acts still in place. Shortly we will get an update from the RFS right here at the RFS headquarters.Thank you. We will cross back in a moment when update kicks. First we will go to Cameron Price. What are the conditions like on the ground?Yes, it good afternoon. Pretty benign conditions to be honest. Not a lot of wind at the moment and it has been raining on and off most of the day. Later, a drizzly rain, but not enough to impact the fire front. At a bit of a hindrance to crews as they were hoping to put in a bit more containment lines and back burning and they haven't been able to do that because of the late rent. It has really been a case of hurry up and wait. We have been embedded with the parks Rural Fire Service. They have an area of land and wrote around Bell that they have to control. There have been going from location to location trying to put out small spot fires that have been lighting up. Nothing too serious. They have been putting firm on tree trunks that has been smouldering ahead of tomorrow's expected difficult conditions. Strong winds that have been talked about. As the residents a round Bell, they thought they would be a lot worse than it has been. The sound of rain on the roof has lifted the spirits of people in the Blue Mountains. Lifted the spirits of firefighters, but of course, a large amount of concern about tomorrow. Whether these winds all be as strong as predicted, whether the temperatures will be as expected and if, as it is feared, there is any more loss of property. Whether people will be forced to leave their homes because of how serious these fires are predicted to be.Thank you for that. As I mentioned earlier, we are standing by to take you live to the rural Fire service headquarters. The Commissioner Shane Fitzsimmons will speak to the media there in the next few moments. In the meantime, we will go through the damage inflicted on communities in New South Wales in the last few days. Am told we do have it.As 2000 firefighters across the country continue to battle the blaze in the Blue Mountains, attention is turning to many of the residents who lost their homes last week at those still without their properties.We have announced we have activated through declaration the disaster recovery payment. That means the people severely affected by these fires and by severely affected winning you have lost your home or your home has been damaged or you have been seriously injured, to fall into that category, your be eligible for a $5000 payment. For an adult. Or a $400 payment for a child.They have announced Centrelink payments for people who've lost their homes. Whether they are injured or primary producers and their income has been affected because they cannot get access to their business or their business has been destroyed.If you fall into the category of people who have most unfortunately lost their homes or have their home seriously damaged or been tragically seriously injured in these fires, and that payment is available.There are still questions of out what the Federal Government is doing to peoples whose homes were affected but not destroyed but were damaged or the people whose homes don't have electricity. The Federal Government says to watch this space. Insurance groups have set up and a holding one-on-one meetings with people who've lost their homes.The devastation there is quite extraordinary, as I said, we are well equipped to deal with these events and people can make claims as quick as possible, that speed the insurance process up.For many people coming to visit disaster centres... Shane Fitzsimmons crossing live.

centres... Shane Fitzsimmons
crossing live.In light of the forecast conditions and expectations for tomorrow... As we have been speaking now offer several days, the weather situation at the fire situation has been building for what was expected to be the worst of the fire danger conditions for this week. As indicated earlier, we have just had the latest advice is the conditions are going to be worth them were otherwise expected only this morning. There are going to get worse to the point that the fire danger ratings across most of the greater Sydney area, the Hunter and the fire ground areas of the Blue Mountains and the Southern Highlands are going to be widespread, extreme fire danger of ratings. We're talking about temperatures in the midst of high 30s and humidity down to 10% or less. And those at wind strength going to continue as forecast of 40 to 50 gusting 80 to 100 km an hour across all of those whether districts including the firefighting areas of the greater Blue Mountains and Hawkesbury and the Southern Highlands area. Despite the very best efforts of all of our firefighters, the emergency services community, and indeed the communities affected by these fires, forecasts and scenario for tomorrow is about as bad as it gets. With these extreme fire danger ratings, we do not want people leaving decisions to the last minute. I cannot reiterate enough the importance of going through that bushfire survival plan and having a conversation with your loved ones knowing exactly what it is you're going to do tonight and what it is you're going to do tomorrow in anticipation of these fire danger ratings and anticipated run of fire activity across the fire ground areas. What I would also like to say is do not think that if you are in these areas or fire affected areas, do not think that fire will not impact you tomorrow. Do not leave any of your decisions until the last minute. You need to be making decisions only and you need to make decisions decisively and act on them. Procrastination is not going to be the sort of thing that will be of benefit to you tomorrow. What I would also say is lost we will do everything we can, do not wait for a fire truck to get into your driveway. Do not rely on a fire truck coming to your home. Do not rely on a message. Do not rely on a knock on the door. We will do everything we can, but it would be wrong of me to provide a guarantee that we will deliver on providing a truck to every home, a message to every person, it is simply something we cannot guarantee but will do our absolute divest to make sure we do. We have all the contingencies and planning in place to try and do this right across these fire affected areas. As indicated earlier, anyone who does not have an important reason to be in the Blue Mountains, don't be there. Stay away from the Blue Mountains and carriage on hate areas. Currajong Heights area. You're putting yourself in danger. You might be preventing access to those who want to leave and you may also be getting in the way of Fire and emergency services that need to access and service areas in relation to fire activity. As is the case in all of the situations, taking action early is typically important. It can make all the difference to the survivability of you and your family and of your home. As I said earlier, if your plan is that you're going to leave, you need to leave early. I would suggest you need to be leaving before lunchtime tomorrow out of the Blue Mountains. Living in the morning would be the preference. The forecast is that there is going to be a bit of clout in the morning, particularly in the Sydney basin, but that is expected to clear before 10 AM before we seek a hot and dry and windy day setting and from the mid-morning. On days like tomorrow there is every potential that we could see more homes lost and more lives lost. What I sincerely hope is that that is not the case. We have been planning to this, we have built this, we have tried everything we can to retard the spread of these fires and we will continue to do that threat today and is even in an certainly trudged tomorrow. Tomorrow is going to be the worst of the fire weather days. Whatever results from these fires, we will seek to deal with them and do with them were the absolute focus of life preservation and the saving of as much property as we can. We do need to be mindful that on Thursday, lost there will be a direct action in temperatures, the change coming through will result in a dry change and the wind will be quite strong, gusting and running about 40 km on average getting to a 80 km and is areas. Particularly Blue Mountains, greater Sydney and Hunter regions. There will be more than 4000 additional firefighters stood up on standby across the most at risk areas and if I areas -- fire prone areas. -- 1400. The total fire ban declarations have been extended to include the north-eastern corner of New South Wales where we are expecting to see very high fire danger is pretty much the majority of the north-east corner of the state. I once again thank everybody for all that they have done to date and think everybody in anticipation for what they will be doing tomorrow.REPORTER: Aged produce that from 9 AM tomorrow morning people in those areas should leave? My request is that people have their survival plan as they follow that survival plan. Leaving early is always the safest option. If you are looking at saving your life and the life of your family, leaving early is the safest option. 9 AM or 10 AM tomorrow morning would be a sensible time to leave. We are closing schools right across these fire affected areas tomorrow. The full list of school will be on a website. It is not a day off school to go hang out at the shops or skate park with your mates. There were your children and keep your family together the you can make decisions and act together as a family in the event that you are threatened by fire or indeed your plan is tomorrow to not be in fire prone area.

REPORTER: Are we expecting an exodus towards Sydney?The police and punishment services are aware of that. We are encouraging people not to travel to the Blue Mountains. Reconsider travel plans. The police and transport authorities are limiting heavy vehicles and wide load and other significant vehicles from going through the Blue Mountains. We are cognisant of the potential for movement. But we are also mindful there will be lots of emergency service vehicles and firefighting vehicles strategically located and moving around the Blue Mountains Hawkesbury and lower Blue Mountains regions.REPORTER: Given the current forecast of strong north-westerly winds, which communities do you expect will be most vulnerable?It is very much the Bells Line of Road all the way down towards Kurrajong and to the east. We are talking about Mount Lagoon and Colo. We are talking about communities to the east of Winmalee and Springwood such as Yarramundi and the communities through there. And on a broader scale, the communities of the Blue Mountains extending along the Great Western Highway from lack eight lack 82 Winmalee and Springwood. I don't know where these fires we'll end up tomorrow or where the first breakout will be or how many there will be. With 1500, 1600 km of current active fire, we need to assume that apart from the obvious weak points where we have put in containment strategies, we need to expect that any part of these Fire boundaries could see embers spot over for a breakouts occur under these conditions.REPORTER: With the wind is coming from the north- west, is it fair to state that the South Eastern corner of the fire zone is most vulnerable?You are right. The most obvious right. The most obvious under the strong north-westerly winds are the communities to the south, south east of these fires. Depending how the wind swings around. It is predominantly north-west. But in recent days despite the north-west pattern, the localised weather effects can see the wind swing around. We can get a north-easterly influence. It is predominantly areas in the south and south-east, but the reality is that you you are in the proximity of these fires, you may still have some exposure are not to the same extent that the prevailing winds would take the fire.REPORTER: The worst-case scenario... Are you certain of the conditions?We are certain of the weather conditions and the potential for the fires to break out and spread. It is about as bad as it gets. We would normally be very worried about a widespread, extreme weather day that we are expecting tomorrow. If you overlay that extreme fire danger rating across an enormous fire ground situation close to communities and in and around communities already, already taking the homes and properties of so many people, you have a whole new ball game than just a bad weather day. We know we have a lot of active fire and that there is every potential for the fires to break out and every likelihood for them to break out and run South and East and in the direction of people that live and work in these communities. That is why we have been taking it seriously all these days and have ramped up preparations in terms of firefighting resources, trigger points for starting to deliver messages, in terms of the broader emergency Management family working shoulder to shoulder to make sure we do everything we can to protect as much of the community as possible and to save as many lives as possible but may find themselves in the past this far.Where are we at this afternoon with Winmalee? Not much different to where we were this afternoon. A lot of back burning going on. A very dangerous, dynamic fire ground situation and the emergency services doing an outstanding job shoulder to shoulder with the communities they are trying to serve and protect. I am also aware that right across these Fire grounds tonight there are eight series of community meetings. The attendance last night was wonderful. There were 1500 people at each meeting. I expect to see lots of people attending e- meetings this evening and the locals will be able to give information about the things they will expect tomorrow and what it means in a tailored way to communities in the local area.For the Sydney area, what is the fire danger?It is an extreme fire danger rating. The second highest rating on the scale. On days like tomorrow, minutes matter. We need the community to remain vigilant and we need people to report fires to 000, particularly if we do not seek fires in attendance. If we can avoid them becoming large and uncontrollable fires, the better off we will be.

As bad as it gets is how Shane Fitzsimmons describes the living conditions tomorrow. Anyone who goes not need to be in the Blue Mountains, he says to stay away. We will have more about the fire crisis over the weekend and evening. Some other news out of Canberra today. The ACT became the first jurisdiction in Australia to legalise same-sex marriage. I spoke to the chief minister.

ACT Chief Minister Katy Gallagher, thank you very much for your time. There were some emotional scenes in the assembly today. How do you reflect on the development we have seen in the ACT Parliament?I am incredibly proud to have been just a small part of the change that happened today. It has been a campaign that has been hard fought across the country for many years and we have played a small part in progressing it today. I am very proud. Having the chamber filled with people and the rooms next to the Assembly field and making this important legal change was important.What do you say of critics and opponents of same-sex marriage to argue that a tiny jurisdiction like the ACT should not be seeking to change the definition of marriage in Australia, changing the Commonwealth definition by stealth, almost?We disagree with that. With respect, I have listened to a lot of people's opinions on this over the last few months in particular. We reject that a parliament that is elected democratically should have the argument said that they are big enough or not big enough to make laws. Regarding the opponents about seeking to redefine marriage, our act creates another Union for people. We are not seeking to intervene in the area where the Commonwealth laws operate. We will argue in the High Court that our laws can operate concurrently. We do not think it impinges on anyone who is married or rope -- Rick require any religious ceremony. It runs alongside the traditional area of the Commonwealth jurisdiction. The attorney general, Senator Brandis, has released a statement in the wake of the passage of the bill that says that the government is commencing proceedings in the High Court now that the ACT laws have passed. He says he has received advice from the Solicitor General that the ACT legislation is inconsistent with the Commonwealth marriage act.It will be for the lawyers to put the case to the High Court. George Brandis has told me he will proceed along that path so I don't think it is any surprise. It will be for the lawyers to argue and the High Court to determine. They are the decision makers in the end. But in the meantime, we did not feel the threat or having that hanging over our heads from the Commonwealth should change what we said when we campaigned in the election a year ago.What about the view expressed by many that there should be a nationally consistent marriage laws, that does not really achieve that, does it?We agree with that. I don't agree with a pot -- a lot of what George Brandis has said, what we would prefer consistent laws. We waited to introduce legislation based on seeing whether the Commonwealth would resolve it at a Federal level in the last Commonwealth Parliament. They failed to do so so we have proceeded without act. We would prefer it was dealt with in the Commonwealth Parliament, but it has not been. I said this morning that nothing would give the greater joy then to repeal these laws and the ACT because the Commonwealth Parliament had created the ability to end discrimination around a certain part of our community accessing marriage. We will leave it to the Commonwealth Parliament to decide if they move and how they do so.The Commonwealth has asked the ACT not to give effect to the new laws until the constitutional validity is determined. One of the arguments put by the Commonwealth is to avoid any distress to individuals who may enter into a ceremony of marriage in the ACT only to find that their marriage is deemed invalid by the High Court. To Franka, I find that view quite patronising.It is something that adults will make a decision about, whether they want to use the laws we have created. Consenting adults wanting to get married. They do so with their eyes open knowing there is some level of uncertainty around the laws because of the Commonwealth's issuing action in the High Court. I would argue it is the Commonwealth creating distress around what we achieved this morning because of the part they have chosen. We did not need them to get involved and they did not need to, they have chosen the path to the High Court. We have chosen to defend it and I think that provides some comfort, that the ACT government will be going in hard to defend these laws against the Commonwealth attack.Some amendments have been made to try and make these laws as strong as possible. Some of the advocates have said you could have gone even further. Do you see their point? Are there some elements that you might have made even stronger to avoid being ruled invalid by the High Court?We will keep those discussions going with those stakeholders. We are very proud of the bill that was drafted. We drafted it based on our own legal advice. We have seen a lot of prominent lawyers in this space providing their own opinions about what could strengthen it or make the chances of it being upheld in the High Court stronger. We are not dismissing those views. We have made some minor amendments to the name of the bill in terms of responding to that. We never thought our bill was wrong or it would not stand a chance of being held up in the High Court. We are trying to collaborate with all of the stakeholders who are genuinely interested in same-sex law reform to ensure we'll remain on the same page. We will continue those discussions with Australian Marriage Equality over the next few weeks but we are keen to see this legislation pass and get it operational. So hopefully some people can get married if they choose, before Christmas.You told the Assembly that there is no longer any excuse to discriminate against same-sex couples in our community. More than anything they are our equals and the outside marriage equality act puts this fundamental right into law. Given it is a human right in your view, is it time for the colleagues at the federal level to have a binding vote as opposed to a conference vote -- take conscience vote?This is where it gets difficult, when he had to tell other arms of your political party what to do. We have campaigned internally within the Labor Party to amend our platform to allow for marriage equality. It happened last year and was led by the Deputy Chief Minister. We have not faced a problem and it has been a United eight votes. I would say it has helped us to progress this, that we are united and we did not need to exercise a conscience vote has certainly helped us to progress it. I think if that sets an example for other state branches, it is a good outcome.There has been a boost to tourism in New Zealand in the wake of similar legislation. Would you hope we see a similar influx following the passage of these laws?They are most welcome and I hope people do use the laws. We can only create laws like this and we then need people to use them for them to have any real meaning. If it means a flood of interstate tourism to the ACT, Soviet and they will be very welcome.Thank you very much for your time. A quick break and when we return our panel for -- Paul Kelly and Peter Hartcher and the reaction to that development in the ACT Assembly.

This is PM Agenda, thank you for joining us. Coming up Peter Hartcher. Also be talking to the Finance Minister. First the latest from the newsroom. We have heard the latest from the RFS, the head of the rural Fire service is warning the conditions forecast for tomorrow are going to be worse than originally expected. Commissioner Shane Fitzsimmons says the latest advice is for extreme fire danger ratings across the greater Sydney area, the Hunter, the Blue Mountains and the Southern Highlands. Despite their best efforts, the suggested scenario for tomorrow is as bad as it gets. The Commissioner is ageing of those in affected areas is not to put off making a decision about leaving and leaving early preferably by mid- morning tomorrow. Dozens of fires continue to burn across the states. There a four watch and act are loads and place including the State Mine fire near Lithgow. The Coalition will seek parliamentary approval to lift the debt ceiling. The government wants to see the limit lifted to $500 billion from the current $300 billion which is expected to be reached by the end of the year. Joe Hockey says current trends show peak that will now exceed $400 billion by 2016 which is up from the $370 billion forecast before the election. Gay and leg spin Couples will be able to wed in the ACT after a bill that legalises same-sex marriage past the territory's legislative assembly. People in the public gallery clapped and saying Love is in the area when the bill passed shortly before midday. The first marriages are likely to take place in December. The Federal Government plans a challenge to the laws constitutionality and High Court. Police in Victoria are treating the death of a man in a suburban sports oval in Melbourne's south-east this morning as suspicious. Several passers-by discovered the body on a track in the suburb of Oakleigh. Police say he was in his 20s and of Asian appearance. The crime scene has been set up after blood was found in the area near the body and on the man's face. In sport, Anthony Mundine is hoping he can reschedule his fight with sugar Shane Mosley after the American cancelled about. Mostly is currently on a flight home after a stand-off with the promoter who failed to pay his $1 million the interval ahead of the scheduled fight tomorrow. The weather forecast around the nation for tomorrow... Joining me now, the editor of The Australian newspaper Paul Kelly and the editor of the Sydney Morning Herald, Peter Hartcher. I want to ask you Peter about the increase in the debt ceiling to $500 billion after the debacle in recent weeks in Washington. It seems a sensible move from Mr hockey.It was a sensible rationalisation for a move which an Opposition the Liberal Party would have chastised the government. There was all sorts of criticism and shenanigans from the Liberal Party when they increased the debt limit in the $200 billion range and now they are increasing it from $300 to 500 range and now they are increasing it from $300- $500 billion. Hockey as Treasurer is lucky that hockey doesn't have himself to oppose him. (LAUGHS) Hockey as Opposition Leader and Abbott as Opposition Leader would have given the government a hard time to this.Peter or come-backer John that. bills included the explanation that this is the legacy of about Labor government.I think it is a sensible move as far as the Abbott government is concerned. They can blame the former Labor government for the budgetary situation. Clearly, they do not want to go back and seek approvals. It is a logical step for them to seek a substantial increase and blame the Opposition for the overall budgetary situation.Which is said, Peter, was the rational as well there. That is part of the explanation, wasn't it?Yes, it is. It is always very useful and handy to blame the outgoing government for a situation like this. As it should. The debt ceiling is really a side issue. The big issue here will come back to the question that still hangs over the Abbott government and Joe Hockey as Treasurer in particular. That is this. After all of the bluster and positioning, G they have the political will to impose the structural changes on spending and revenues that the budget obviously needs? The budget is now in a state of perpetual slippage. Revenues are constantly being revised down, Labor revise them down six times in the last three years. Therefore the budget deficit is in a constant state of the pitch going up. The commission of audit announced this afternoon is a mechanism by which the government seeks both the substance antiauthority to then go ahead and make the changes. The question still hangs over the entire enterprise, to have the political will to make the changes they need to make?They certainly have the scope to look at those changes, but what you make of the commission of audit? How it is made up and chaired by Tony Shepherd and including Amanda Vanstone, Tony Cole, among the five panellists. As expected?I think the interesting thing is that the interest the business Council of Australia has with Tony Shepherd chairing the commission of audit and the BCA also involved in providing the Secretariat. The business Council has done a lot of work of the last few years and terms of the structure of government and will see these ideas come into the fall. I think overall the commission of audit looks good and balanced, but this is going to be a substantial challenge as they have to do a lot of work very quickly. There are two reporting periods, the first in January next year and the second in March. It is not just about government programs, it is about the structure of government itself. It is about efficiency, better delivery of services, and looking at what can be outsourced and privatised and it is looking overall as the Commonwealth State duplication. I think the sort of review is extremely timely and the question is how astute the recommendations will be and at the end of the day whether the government has the willingness and commitment to press ahead with them. I want to ask you about the developments on the same-sex marriage issue today. Historic legislation. The ACT becoming the first jurisdiction to legalise same-sex marriage. Big uncertainty. Whether it will survive the looming High Court challenge from the Commonwealth.That is right. It might, it might not. But it is a part of the larger movement that we see not just from the ACT government at from other State governments, from New Zealand and even as we now see in the last 24 hours from the engagement of Tony Abbott and sister. -- Tony Abbott's sister. This is all a trend in movement and favour for gay marriage and a movement that has been building across the world for years. It is part of an even larger trend but in recent centuries towards the granting of rights to minorities of all kinds. The question is whether... Hold ported it is for Tony Abbott to cast himself -- how important it is for Tony Abbott to customers of as the obstacle to that movement of whether he lets a conscience vote occur. That is a matter for judgement. On form, he will resist this and resist all such movements despite his family connections. Paul Kelly, even if these laws are scuffled in the High Court, following from what Peter just said. The same-sex marriage campaign will continue and it will inevitably be something that Federal Parliament Terry and have to consider again, want it?That is probably correct. The point I would make about this is, if we look at the new Parliament, we don't have a support for same-sex marriage. Not in this department. I think that is the case regardless of whether the Liberal Party decides on a conscience vote or not. The numbers are simply not there. That is why essentially people moved to try to get this legislation up at state and territory level. The point to make about that is that this issue was always going to go to the High Court. There are very serious doubts about the constitutional basis of this legislation. I recollect that the attorney said that he had a device from the solicitor general casting doubt on this. The issue will go to the High Court and the High Court will take this decision and I think it will be very important decision because of the High Court stymied the states and territories I do not think their support exists in terms of the national Parliament over the course of the next three years. Gentlemen, great to chat. Thank you for that. A quick break and when we return I will be joined by the Finance Minister, Senator Coleman.

This is PM Agenda. With me now is the Finance Minister, Senator Mathias Cormann. Thank you for your time. Increasing the debt limit. If Labor had done it you would have been outraged, wouldn't you?We have got to do it to fix Labor's mess. When Wayne Swan delivered the budget, he knew he would reach the debt limit by the end of the year. The advice we have got from Treasury is that we would reach the $300 billion legislated limit by 12 December. If you look at the economic statement pre-collection of the economic and fiscal Outlook it indicates the gross debt is heading for $400 billion. Since then the budget position has deteriorated even further. The problem is that Labor left behind a budget in very bad shape. Not only are the numbers that, the trend is very bad. It continues to deteriorate. What we have started to do and what the Commission of Audit would have us do is to reverse the trend and repair the budget.It is a very broad scope you have given them in these terms of reference in the audit headed by a Tony Shepherd, the head of the Business Council. It is a broad scope because you are not allowed - - but you are not allowed to look at the GST and you will not touch health or education. These are two of the biggest spending portfolios. Firstly we will not change the GST. It is a review of the operations of government, ensuring they are a sufficient as possible -- as efficient as possible. It has a very broad scope and can look across all the operations of government. We are not going to cut spending to health and education, but we want to make sure we can spend more wisely and achieve better outcomes for people across Australia. The people across Australia are expecting from the government that they will receive better services delivered in a more efficient way. The overall funding envelope is one thing. The quality of the spending within the funding envelope is a very important part of the equation as well. In relation to health and education we think the Commission of Audit can do some very good work for us.The two phases one in January and one in March, you are talking about cuts that could be fed into the May budget of next year.There will be two phases. An interim report by the end of January and a final report by the end of March. In 1996 when the Howard government ran a similar process, it took about three months from when it started to win it delivered its report to the government. The purpose is to receive recommendations which will fit into the pretty 14 budget process -- 2014 budget process to help us repair the budget mess we have inherited from Labor.If that is the case, why did you not release the media at that before this so we know the state of the books?We are going through a they come -- a calm and methodical process. We know the Labor Party are jumping up and down as they used to do in government. We do not think that lead to good outcomes. Our process will be purposeful and methodical. Since the election we have started a thorough review of spending across government to make sure there is no waste or double ups in that spending. We are announcing the Commission of Audit. We are also working on the media fiscal Outlook which will be released before Christmas and we are putting in processes in the buildup to the 2014-2015 budget. But we will have time to scrutinise it?I promise we will not release it on Christmas Eve.Let's look at some of the elements of this review. The consolidation of agencies and boards looks at the effectiveness of the government machinery. Do you stand by the commitment that job losses in the public service will only be through attrition?There is a range of things. Right now there are a redundancy is happening across the public service as a result of decisions that Labor made in government and its recent budget up dates. Secondly, we did take a policy to the last election it we will implement, to reduce the size of the public service through natural attrition. People across Australia expect us to spend their money wisely and to make sure that we can shift as much of the limited resources available to government away from pure administration to service delivery as possible. The objective has got to be that the resources that are made available to government by taxpayers are targeted at delivering better outcomes for people, not just ever increasing bureaucracy.One thing that has been increasing has been middle-class welfare. Attempts to rein it in by the Labor government, but you have asked this commission to look at the rising cost of social spending. Does it need to be reined in as one of the structural shifts?We think it is important for the commission of audit to take a strategic look at the operations of the whole government and provide a report to consider. In terms of responding to the recommendations that will come our way, we will respond in a way that is consistent with our commitments from the last election. We will not be implementing recommendations that would be inconsistent with it.Not in the short term but it could provide you with an agenda for the second term. Middle-class welfare could be one of those things. Almost inevitably, you would think you would have two Rennick in.The terms we have released have a very important task. It is to put the budget on a sustainable medium to long-term footing. We have serious challenges, one because of the state of the budget we inherited, but also because there are fiscal pressures on the spending side, in particular in relation to the ageing population. There is some important work to be done. We want the Commission of Audit to do its work with no interference from government, but government will make decisions on what we think is sensible to intimate and what is not.A quick break and we will be right back. Stay with us.

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