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This is PM Agenda with David Speers.

I am David Speers, welcome to PM Agenda. Our top stories this hour - 50 new medicines added to the Pharmaceutical Benefits Scheme aimed at helping those with cancer, diabetes and MS. Former Labor powerbroker Eddie Obeid accused of unusual lobbying at a fresh corruption enquiry getting under way today. And the world mourns the death of singer-song writer Lou Reed who passed away earlier today in New York.

Welcome to the program. We begin today with some good news for sufferers of cancer, diabetes, multiple sclerosis and other diseases around 50 new drugs and amended medicines have been listed on the Pharmaceutical Benefits Scheme by the Government today. The cost of this is unknown because negotiations are still under way with some pharmaceutical companies, but the Health Minister Peter Dutton announced these new medicines today, including a drug called Dabrafanib sold as Rafin La. That is seen to be a first for melanoma in terms of targeting a genetic mutation present in around half of melanomas. Other drugs listed as well we will be talking to the Health Minister later on. The cost of that particular drug is estimated to eventually cost some $60 million a year. So when you look at the listing of 50 drugs, it's not a small amount of money involved in today's announcement. How will this be paid for? Well, clearly it is going to impact on the budget bottom line, the Government is in the health area also looking at the sale of Medibank private, something that it moved on when the Howard Government was in place, it was largely shelved over the last six years but now a scoping study has been released to progress this early in the new year. The Health Minister was talking about the funds that might come from the sale of Medibank Private today.I think once we have a better understanding of what proceedings may be realised then I think we can have a better discussion about where the proceeds might go. I make the point the government was left with an enormous debt, a record debt in this country history we have never seen a debt like that which Labor left this incoming government and it is going to take a lot to deal with that debt and if we are paying off Labor's interest bill it will make it more difficult for us to do what we want in areas of health, education and elsewhere.The sale of Medibank Private might help deal with the debt. The listing of drugs on the PBS though of course does not. More on this coming up as I say we will be talking to the Health Minister Peter Dutton a little later. We will also be covering a few different things today. The Government has also announced a 20 year strategic plan for Australia Antarctic interests. We will talk to the man who is going to head up that strategic plan, why we need it, why we should be concerned about an tax ka, what is going on there -- Antarctica, what is going on there in particular. We will look at the escalating tensions between China and Japan, that have been on show in the last 48 hours. What's it all about and where is it heading. We will talk to Rory Medcalfe from the Lowy Institute. First what's been helping at ICAC, the NSW independent commission against corruption. A fresh corruption enquiry regarding Eddie Obeid, the former Labor powerbroker who was found earlier this year to have acted corruptly in relation to a coal mine in NSW. Today's investigation which is just getting under way and will run for a few weeks relates to a couple of, well, fairly luke rative restaurant -- lucrative restaurants in Circular Quay in Sydney. Tell us about the case that was laid out at the start of today's hearing against Eddie Obeid, Cameron Price.David, good evening. Well today was about setting out some guidelines for what this enquiry will focus on. Three elements of alleged corruption, you mentioned the restaurants, the Obeid family secret involvement in owning those restaurants and allegedly Eddie Obeid's influence in government in making the leases of those restaurants at Circular Quay renewed without tender. Also a company that the Obeid family had an interest in Direct Health Services, and the fact that that company was awarded a number of health contracts by the NSW Government while Mr Obeid was a powerbroker, a member of parliament here in NSW. And finally a number of water licences that were allocated to the families Hunter Valley property, water licences that went up exponentially again, allegedly because of involvement and influence by Eddie Obeid.When will Eddie Obeid himself front this enquiry?Not this week. We know his son Damien will be up on Wednesday, and that's important because today we heard about this secret ownership structure surrounding these restaurants at Circular Quay. John Abood the brother-in-law of Eddie Obeid admitting he was the sole director and claimed that he was the owner of the company that was the parent company for these restaurants, despite the fact that the Obeid family trust owned 90% of the shares in this company, and that Damien Obeid at the end of every day came and collected the takings from the restaurant. Therefore hiding the Obeid involvement in the restaurants. We will hear from him on Wednesday, expect to see Eddie Obeid next week or the following week, this will be a three week-long enquiry.Thanks so much we will catch up with you later. Let's check some of the other top stories this hour, Helen Dalley is in the news centre. Thanks. Yes, in other news two people have been seriously injured after a bus crashed through the wall of a house in Brisbane. Sky News Brisbane reporter Elizabeth Tilley filed this report from the scene.You see the scene behind me, it's a miracle there are any survivors from this horrific crash. A bus and a car collided here at the intersection of Dart and Peel Streets in Redwin Bay in Brisbane's south east around 10 a.m. This morning. The bus then crashed through two fences, hit a parked car and then careered into the wall of the house behind me. The 18- year-old driver of the car is in princess Alex an ra-Hospital with life then be injuries. A 37-year- old woman sipping coffee in the backyard of the house is also in hospital with serious injuries. Six passengers of the bus were treated for minor injuries here at the scene but are otherwise doing OK. Police are continuing investigations into the cause of this crash.

Police are desperately searching for a 2-year-old boy missing from his north Brisbane home since lunchtime yesterday. The child was taken by a woman who walked him to nearby shops, the little boy's been described as Caucasian in appearance, with blond hair. He was wearing orange shorts and an orange shirt. The cost of the NSW bushfires is estimated to have risen to $145 million. The insurance council of Australia says more than 1,000 claims have been made with over 90% of damaged and destroyed properties assessed. The ICA says some of its policy holders have already received payouts. More than 200 homes were destroyed, and over 100 were damaged in the bushfires across NSW. New spying claims against the US have prompted Brazil's President to cancel her state visit to Washington. While headlines in Germany report the US has been listening to Chancellor Angela Merkel's phone calls since 2002.It is not the way friends expect to be treated, the headlines in Germany this weekend, the US has been listening to Angela Merkel's cell phone calls since 2002. Even longer than earlier reported. And President Obama was told about this three years ago. This afternoon the White House said that the President was never told. On the streets of Germany outrage directed at the US. The Chancellor herself feeling violated by these daily revelations, that the US has beenIng on one of its closest allies.Completely unacceptable, she said. Germany is now the fifth US ally to summon its American ambassador to lodge a formal protest. In France outrage over the US intercept of 70 million e-mails and the bugging of their Washington embassy. In Brazil, their Washington embassy bugged their stale oil company hacked by US spies. Mexico, the US hacked the President's e-mails. Spain too calling in the US Ambassador.Are they doing it for industrial reasons? That's the suspicion in Europe, is that this is not really about counter-terrorism, it's a lot more about industrial espionage. Since the Since the end of World War II the US has had a no spying agreement with the UK, Australia, Canada and New Zealand. The Germans are planning to send a delegation to Washington to demand they too be added to that list. Lou Reed the singer-song writer and guitarist best known for the hit song 'take a walk on the wide side' has died aged 71. In a career spanning more than five decades he was known for his distinctive dead pan voice and deeply personal lyrics. In 1964 he formed the Velvet Underground, a band credited as one of the most influential in the history of rock and roll. Reed in turn credited artist Andy Warhol has being responsible for his career success. The cause of his death has not yet been revealed, but Reed underwent a liver transplant in May. The launch of the 2013 Melbourne Cup carnival has begun with wet and windy conditions at Flemington. Sky News reporter Greg Thomson was there for all the festivities, and he has more.It was a real party-like atmosphere here at tem Flemington for the launch of the 2013 Melbourne Cup carnival. It is the 153rd running of the Melbourne Cup next Tuesday and the anties paption and excitement is starting to build. There were ex-champions on display, including Rogan Josh, Might and Power and several other winners of the historic race. And former trainers as well who were looking to go all the way next Tuesday with Mark Cavanagh is up and about looking to go one better. He explained to the crowd that winning the Melbourne Cup is life-changing. Then there is bart couplings the veteran of horse -- Cummings and Gay Waterhouse. The fashion, ladies are told to wear floral prints, for the men it is all about black, grey and white. It is an occasion for everyone, the form guide will be studdayed heavily no doubt for the rest of the week as Melbourne gets ready to party and show the world just how big this horse racing event is. The race that stops a nation.

And in other sport, Fiji will warm up for its Rugby League World Cup clash against Australia, with a clash against the Irish tomorrow morning. In the other game this morning, France just edged out PNG while the Kiwis downed Samoa despite a poor second half. New Zealand led 34-4 before Samoa launched a late fight back. They got within four points before the reigns champs powered home. It could have been a bigger margin but for this blunder from Sonny Bill Williams.Sonny Bill, Sonny Bill! Oh, he's dropped it. He slipped over the dead ball line.Look how confident he is. Oh, no.In the other match a second half field goal proved the difference in the France PNG clash, but David Mead did have the chance to win it for Papua New Guinea, he missed this penalty goal from right in front with just two minutes to go. And tomorrow's forecast:

It is back to you David Speers. Thank you. After the break we will take a look at Antarctica, the government has today announced and launched a 20 year strategic plan for Antarctica, why do we need one? And we will also hear about a very interesting research project that's about to get underway there. Stay with us.

Welcome back to the program. We will turn now to Antarctica, the Environment Minister Greg Hunt has today announced a 20 year strategic plan for Antarctica, this was promised by the Coalition prior to the election, it's essentially aimed at ensuring that Antarctica remains a place of peace, and of science and that Australia's leading role there given that we control more than 40% of the territory, well it remains that way. There has been suggestion, particularly in a recent report by the Australian strategic policy institute, that Antarctica could in fact no longer be a place of such peace, with growing militarisation in fact as various countries vie for dominance, not so much in Antarctica but globally. Using Antarctica as a bit of a pawn in that exercise. This strategic plan is about addressing those concerns and ensuring that Antarctic a remains what it always has been. Along with the strategic plan the government announced funding today for the Aurora project, a research project involving 24 scientists around the world who will trek some 550km inland from the Australian post in Antarctica to drill into ice core some 2,000 to 3,000 millimetres. This will look at the history of climate change in well over those last couple of millenia and contribute very significantly you would expect to the thinking around climate change and a project that gets under way from December. Now, chosen to lead the 20 year strategic plan into Australia's role in Antarctica is Dr Tony Press, and Dr Press has, well a long association with Antarctica, he chaired the Antarctic treaty committee for environmental protection and was the director of the Australian Antarctic division and is also the head of 9 Antarctic climate and ecosystems co-operative research centre in Tasmania. I spoke to him from Hobart earlier. Thank you for your time. Can I start by asking why do we need a strategic plan for Antarctica?Well, it's been 20 years since we have had a good hard look at how we operate in Antarctica and what our goals are for our Antarctic interests. Australia claims 42% of Antarctica as its own, the Australian Antarctic Territory. We have been a major player in Antarctica for over a century and we have a very strong interest in science and we have a very strong interest in having Antarctica a place that's free from conflict, and dedicated to peace and science. So it's timely that we come and have a good hard look at what our interests are in Antarctica and how we achieve those interests.Is there a risk that that position of Antarctica as you explained, being free from conflict is under some threat, a recent strategic policy institute report did warn of - a lot of growing international interest and even militarisation when it comes to Antarctica.Yes, the Aspi report did raise that as an issue to be aware of. One of the things about Antarctica is since the 1950s, it has been a place of peace and cooperation and the Antarctic Treaty is one of the exemplar treaties of the planet. It is one of the treaties that's been the most successful treaty ever negotiated. But we do have to look to the future and we do have to look to the future with our eyes open and be aware of what the future sources of conflict might be and to address those early in the piece so they don't become issues that drive nations apart. Antarctica is all about nations collaborating and cooperating with each other.What are the potential areas of conflict that you see and how seriously do you take them? What the Australian Strategic Policy Institute was talking about is whether there were covert uses of Antarctica for say gathering military intelligence or for operating satellites and the like. Now they - that's something that we should have an interest in if it's occurring and we should look to see ways of making sure that doesn't become a real source of conflict. Most of the tough issues in Antarctica are really about access to fishing resources at the moment and there is a very well established system for dealing with that and it works very well.When we look at Antarctic a's role as a play of science we do see strong international cooperation, in fact as we are about to see more of it with 15 partner organisations teaming up in a new research project that the minister was talking about today. Can you tell us a bit more about this, what it's aiming to achieve?Yes, look that's a very good example of international collaboration in Antarctic science. One of the things that ice cores do is they contain a very accurate history of past climate. And this project involves going deep into Antarctica, 550km inland from the coast, and drilling an ice core that will give a very fine detailed record of the last 2,000 or 3,000 years of the global climate. That's really important internationally but it is also really important for Australia because that ice core will tell us more about not only the climate in Antarctica but also changes that have occurred over the last 3,000 years and how they might have affected the region and Australia as well as the planet as a whole. Will this be an important contributor to the current debate about climate change?Every piece of ice core record that comes from Antarctica reveals a new secret or new information about past climate. And they are the most accurate records of past climate that you can get.When it comes to Antarctica itself, a NASA report just last week showed record levels of winter ice coverage. I guess there is some debate about why that might be but in terms of its own climate is Antarctica in pretty healthy shape?Well, Antarctica is different from the Arctic. Antarctica is a continent surrounded by very cold water whereas the Arctic is actually an ocean surrounded by land. And so it is subject to different climate drivers. And yes Antarctic a will remain colder and remain colder for longer than the Arctic will.That doesn't mean therefore that there is some doubt about whether the climate or whether the temperature is warming globally?No, the ice core - sorry, the sea ice extent in Antarctica is not a direct indicator of whether the climate has warmed or not What's happening there is a very regionalised atmospheric and ocean ic climate driving -- Oceanic climate driving and that in turn affects the distribution of sea ice and the maximum winter extent. There are some parts of Antarctica where there has been a great loss of sea ice, comparable to the losses that have occurred in the Arctic and there are other parts of Antarctica, such as the Ross Sea region below New Zealand where the sea ice has increased by about 1% of decade for the last few decades.We wish you well with the work ahead of you. Thanks for joining us this afternoon.Thank you very much. That's Dr Tony Press announced by the Government today to lead the 20 year Australian Antarctic Strategic Plan. He will deliver that report by July next year. After the break we will turn to the rising tensions between China and Japan over the last 48 hours. What's going on. What's likely to happen. Stay with us.

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Are you watching PM Agenda. Thanks to your company. In a moment we will be discussing the latest flare-up of tensions between China and Japan. Rory Medcalfe from the Lowy institute with us in a moment. First the news with Helen Dalley. As you told viewers before 50 new and amended medicines have been added to the farm suit call benefits scheme -- Pharmaceutical Benefits Scheme aimed at helping those with cancer, diabetes and multiple sclerosis. Peter Dutton says the latest changes will be welcome news for up to 230,000 Australians with medications now to be subsidised under the PBS scheme. Patients will mostly only have to pay $5.90 if they have a health card. A fresh corruption enquiry involving disgraced former NSW Labor powerbroker Eddie Obeid is under way in Sydney today. The NSW Independant Commission Against Corruption is hearing allegations Eddie Obeid attempted to influence officials over waterfront retail leases at Sydney's Circular Quay. The hearings will also examine allegations Mr Obeid influenced public officials on two other matters. In July he was found to have acted corruptly in relation to rural coal mine licences. Former army chief Peter Leahey has backed calls to block Australians who have been fighting in Syria from returning home. Former Foreign Minister Bob Carr says he considered the option when Labor was in government, and Lieutenant- General Leahy has today publicly supported the move. He told Sky News the law should be reviewed to see what can be done to prevent dual citizens going to Syria to fight in the first place. It is estimated there are 200 Australians involved in the conflict, with about 80 engaged in conflict. Two people are seriously injured after a bus crashed through the wall of a house in Brisbane. A bus and two cars collided near the intersection of Peel and Dart Streets at Redland Bay. The vehicles then crashed into two homes. Police say the drivers of the cars, one male and one female, are believed to have serious injuries --. Whilst passengers on the bus have minor injuries. The cost of the NSW bushfires is estimated to have risen to $145 million. The insurance council of Australia says more than 1,000 claims have been made, with over 90% of damaged and destroyed properties already assessed. The ICA says some of its policy holders have already received payouts. More than 200 homes were destroyed and over 100 were damaged in the bushfires across the state. Britain is predicted to experience transport chaos as hurricane-force winds batter the southern parts of the country. Bridges are shut, some railways closed and flights cancelled. Storm St Jude started battering the south-west from around midnight local time. The storm is expected to blast across England and Wales throughout the night and the morning. Winds of 148 km/h have already been recorded on the isle of White and torrential rain is forecast and there are a number of flood warnings in place. Tomorrow's forecast around the nation:

We will have more headlines shortly but now back to you, David.Thank you. We will turn now to the tensions between China and Japan which have been on the rise even in just the last 48 hours. The two Asian powers have been in what is now a long-running dispute over some rocky uninhabited islands known by Japan as the Sincayu islands known by China as the Dali Islands. There is admittedly maritime territory around these islands at stake which is thought to contain rich oil and mineral deposits. Over the weekend Japan scrambled to fighter -- two fighter jets in response to Chinese military aircraft flying, well perhaps too close to their air space. Japan is reportedly considering plans to shoot down any unman ed drones that do enter its air space and Japan's Prime Minister Abe has been ratcheting up the rhetoric at least. He's warned that Tokyo is prepared to be more assertive with Beijing and he addressed a rally of Japanese troops to essentially say that they will protect their territory to the end. Have a look. TRANSLATION: post World War II we have prospered and moved forward as a peaceful nation. This is something for us to be very proud of. In order for us to continue protecting this peace into the future we must be vigilant. Let us you night in prosperity to the nation and protect the end the country's territories.Well in response to this Chinese defence ministry spokesman has said that China's military capacity should not be underestimated. TRANSLATION: we advise relevant parties not to underestimate the Chinese armies resolute will and determination to protect China's territorial sovereignty. If Japan does what it said and resorts to enforcements measures like shooting down aircraft that is a serious provocation to you, it is an act of war. -- to us, it is an act of war. We will surely undertake decisive action to strike back.Well Rory Medcalfe is an Asian policy expert at the Lowy Institute and joins me now. What are we seeing here, how do you interpret the pretty strong language between both China and Japan over the last couple of days? Yes, it is quite worrying. This of course does come against the background of several years of quite assertive rhetoric and really some assertive actions on both sides. Now I don't think either leader really wants conflict, I think they are actually quite sensible deep down about that and fully aware of the economic enmeshment of the two countries and so on but we are entering a new risky phase because they are talking themselves into a corner, and there are a few capabilities in play such as the Chinese unmanned aircraft, for example that are adding a new un predictable dimension to these tensions.Well it's a good point. Is Shinzo Abe a more hawkish Prime Minister now talking himself into a position, where if an unmanned drone does enter Japanese air space he has to do something to back up his rhetoric?I guess as I said it's a new un predictable capability and it is on the record that a month or two ago the Japanese Defence Minister sought the PM's advice on this issue and my understanding is that there is authorisation that's been given, at least reports authorisation has been given that the Japanese forces now have that option. It is still unlike lie they would use it. Unfortunately when you have got an unmanned aircraft coming into the air space it is a bit more difficult to simply communicate with the pilot and tell them they are on the wrong course. It does add a pretty thorny new problem.What do we know of the comparable military strength of these two countries now?Well, we shouldn't forget that the Japanese military, although it is smaller and so forth than the Chinese military, it's got a smaller budget and it has actually a really very small budget relative to Japan's economy, however it is highly professional, it is at a conventional level at least more technologically advanced than the Chinese, the Japanese navy is still a force to be reckoned with. So we shouldn't assume that if there was a clash, and I don't think a clash is likely in the near future, but if there was a clash we shouldn't assume that China would automatically emerge victorious from that.Now, this is all about supposedly these islands known by China as the Daoyu islands by Japan as the Sincacu islands. Tell us about them, why are they so important to both countries?There are several dimensions to this and I don't think the economic dimension, the resource dimension is the vital one. There is a national pride element at this, the Chinese insist that it is essentially their territory and that it was, I guess, taken from them in the 19th century. The Japanese insist not only is it their territory it is not disputed. In fact for the Japanese to even see themselves acknowledging a dispute exists would be a step backwards for them. So there is a symbolic level. Finally there is a strategic dimension as well because China is seeking ways to get access to the western Pacific ocean so it doesn't feel boxed in or contained by the navies of various US allies, including Japan. The more it can normalise or legitimise its naval access through the island chains and into the western Pacific the more that it feels it has a strategic advantage. So there are many factors at play here.Both countries of course are so important to Australia, economically, strategically, what is at stake for Australia here and I guess how important is it for us not to take sides too much in any of this?Well, a lot is at take for us because for a start -- at stake for us because for a start our biggest economic partners are in that part of the world. China, Japan, South Korea. Any crisis or conflict in North Asia will effect us deeply and quickly. There are also security and alliance considerations here. We are not an ally of Japan but we are an ally of the US which is Japan's ally. We do have quite a close security relationship with the Japanese even if we are not a formal ally. I do think if a prolonged confrontation ensue ed between China and Japan we would be expected to state a position. And I tend to think that we would state a position in support of Japan but with a lot of caveats around that, really cautioning the Japanese not to take provocative action.Just finally, how much dialogue is going on at a political level between China and Japan?Well, very little. That's a huge part of the problem I mean the Chinese have been reaching out to a number of countries this year to rebuild their diplomatic image after a few bad years, Chinese strategic assertiveness damaging their image. The Japanese are also reaching out to other countries in the region to encrisis their circle of friends. The -- increase their circle of friends. The two countries barely speaking to each other in all of this are China and Japan. At the very time they need channels of communication they are almost both choosing to take the risk of not having those channels. I rel appreciate your insight and analysis on this. Thanks for joining us.Thanks. Cheers.We will take a break then back with our panel here in Canberra. Looking at what's been going on politically over the last few days. Stay with us.

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Welcome back to PM Agenda. Thanks for your company. Welcome to the panel joining me in Canberra, Shane Wright from 'The West Australian' and James Masola from the 'Financial Review'. I want to start with the Reserve Bank, now this has been kicking around for a week since Joe Hockey, the Treasurer announced $8.8 billion will be injected of our money and this is borrowed money as well we should point out, into the Reserve Bank's reserve fund. Now since then there has been a big question mark as to why and whether they needed the money and now it's been revealed that the former Treasurer Wayne Swan received advice from treasury, the department, back in April saying the Reserve Bank didn't need this sort of money. What's going on?Well, today we have lost Lou Reed, Lou Reed told us there is no time for phony rhetoric. And I reckon we are in some of this phony rhetoric period. Do you like that link. That, look, you had Mr Hockey go out and say right, we have got to give them $9 billion in borrowed money which will add about $350 million to the interest bill that you, me and Mr Masola will have to pay. And he said, he has couched in this way that I need the Reserve Bank firing with all this ammunition, although he wants to make sure there is - we don't think there is a crisis going on. Apart from that it's, he hasn't been able to produce the evidence that this is what we wanted. He made that announcement --Is that a rainy day fund?One interesting thing is - the next day he announced after that he announced the Reserve Bank released its annual report, we made $4 0.3 billion which is the third largest -- 4.3 billion which is the largest profit the bank has ever made. The reserve fund is largely a function of what going on to the value of the Australian dollar. It can go neg pif Remember the Reserve Bank's biggest job is it print money. It it is not the biggest threat in the world if it goes into negative.It is not the only central bank in the world to print money.No.We are not at that point yet. This is about creating a buffer. That's what his rhetoric has been about, creating a buffer for the Reserve Bank if they are ill financial winds blowing from the US, blowing from China the bank has more room to move, a little bit more insulation if you like for itself and for the economy.True, but the problem is this is the bank that can print money.If we get to a point we are printing money, kweezing then we are in trouble -- quantitative easing we are in trouble.It is not as if the argument that hasn't been really put is why does it need so much extra. The Reserve Bank even in the annual report, Glenn Stevens said just keep letting - don't take any more dividends, we will do this over time. Because the advice that I have got out of the Reserve Bank is that they didn't want to scare the horses about the treasury of the day saying we have to throw $9 billion at the central bank and that came through in the treasury minute as well, they understood it would seem a bad look if the new Treasurer has to do that.Labor's accusation is this money is only being put in there to fatten up the deficit in this year, so it looks - this is the deficit that will be blamed on Labor and then in future years it can be drawn on by Joe Hockey.TheThe politics of this is its reasonably smart from hockey in the same way we saw the debt ceiling raised so much, 66% above what it was is not exactly great news but something they have gone and done and done it early. And in three months time, six months time, will we be talking about this? I don't think we will be.I do like that argument, except of course if the economy doesn't improve. If you have increased the deficit for the current year, what happens if hold on, treasury tells you, look these headwinds we have been warned about, eat into next year's deficit.You can draw on that Reserve Bank reserve fund.See, this is where you run into that problem. It is based on this anticipation that things will be sunny and rosy. Except I have had Mr Hockey saying "No, there is these clouds ahead. There is a lot of speculation going on about what the government is doing so save money here and there, one of them Australia Post might be used as a front office for Centrelink.That's right. Story in the 'Financial Review' today, a colleague of mine, Joe Heath. A good story. The thinking here is Australia Post has an enormous footprint in terms of offices all over the country. Bigger than centre link, bigger than Medicare, one thing the commission of audit will look at is can we actually deliver services through these small shop fronts. We see Australia Post in newsagencies or co-located with those, those sort of businesses today. Now the government's by no means of course saying this will be what we do, this is something on the table, this is a way they could #15i6 money essentially. One -- save money. One other proposal is Australia Post could be privatised. That wouldn't bring in the same revenue as privatising something like the Royal Mail in the UK, I don't think you can do both at 9 same time.This idea that Australia Post offices could be used to deal with all the Centrelink and Medicare issues, I guess the first question that springs to mind, can one person behind the counter deal with everything from the size postage box you need from the Medicare claim you will make and... We have to become more productive. Multi-tasking.It's a lot of...It is a lot and the privatisation I think will get the - it's almost an either-or because you can't hand over these sorts of service provision to a private operationer because there are confidentiality issues raging around.Centrelink and Medicare. Particularly.You could end up with the other idea is you go with Australia Post to privatise, because you look at its annual report it is losing more money more money on the mail side. They are still making a profit. They are because you and Speersy are buying things off eBay every second day.It is not the letters business.You give it a banking licence, which will come up in the son of Wallace enquiry that Joe Hockey is keen to have, to provide more competition in that sector. Make Australia Post a bank?This is ideas floeted around, plenty of examples overseas. It would suddenly make it worth buying, apart from the fact I think its cash flow is over $5 billion a year, there is an asset worth some money. With this idea of Australia Post we have seen a similaring this, Medibank, the government has gone to the election, the previous one as well saying we are looking at selling Medibank Private. Something on the agenda. Estimates in 2007 it was around $4 billion in revenue, now thought a sale would only perhaps raise $2 billion, perhaps $3 billion, it's gone down in value, although I think it is still the biggest private health fund. The other idea floated around and considered by the commission of audit that may actually over the running of the NDIS, rather than creating another bureaucracy, the government might hand responsibility for running the NDIS to Medibank private. It did that I don't see how they can privatise Medibank at the same time.Why not. You could almost subcontract it. Similar privacy reinforce me.It is something that would obviously come with a big conattract ul price tag and boost the inflate the price and value of Medibank.We have gone down the front of privatisation in the job search market. You can understand where Mr Hockey is thinking in terms of perhaps. I think these are all perhapses at the moment The commission of audit has got like, I think we reported just the other day about HECS, that is being privatised which is suggested in the original '96 audit. There will be a lot of different things that will come through. Which are going to create a bit of a political nest for the government. The reviews being conducted or about to be commissioned at the moment.This commission of audit, it involves the head of the business council leading it and various other oesteemed former treasury finance people as well. But not the union movement. The ACTU today complaining there needs to be more transparency with this process, they are worried all we will see will be on budget night from the Treasurer. Here is what the commission of audit found and here is what we are going to do. Do they have a point or is this sour grapes.I think there is a certain tilt to the make-up 69 commission of audit as the people they put on the panel. I don't think that is particularly surprising. If we go back and look at the BCA reform wish list from about six months ago, quite a weighty document, I think we will probably see a bit of what that document at least recommended in there. What I am actually interested in is how will the government handle the politics of this, in a way that's different to the way that the former Labor Government handled the MRRT. Wayne Swan sat on the Henry tax review for six months or so, and announced...Over Christmas.Indeed and announced the sort of options they were going to take up just at budget time. If Joe Hockey...A week before budget.Exactly right. They released the Henry Review and the response at the same time. Rarely the government releases these sort of things without saying "Here is what we are going to do". That has to be upper most in the mind, treasury will be giving that advice, see what happens to the last guys, you might want to give yourself a bit of discussion time with this.What happened in '96 with the commission of audit?Very little of 9 recommendations.They put out the report?No, it was slightly different timing and it ended up like supporting the charter of budget honesty and it looks into that but if you look at the recommendations that came out of that audit, which included effectively reducing the abled pension and wholesale changes that -- aged pension and wholesale changes that John Howard and Peter Costello ran away from. You can see the dust on the copy I have got. It has been left there.A good model I think. I had the opportunity to do this last year when the most recent round of cabinet papers were released. The way they handled the petroleum mineral resource rent tax. A couple of reviews wide ranging consult taleses everyone knew it was coming down the -- consultations everyone knew it was coming down the pipeline.It was opposed by the Coalition at the time which said it would repeal it and it never did.As part of this process for this commission of audit, will any of these hearings be public? This is the point I suppose at the ACTU is making, how much of this is a closed shop?I think they have got an argument put aside, I don't think the ACTU has a role as being represented on the commission of audit board. I don't think that one flies. In terms of transparency, given the way that you, me and everybody else are being treated as mugs presently by elements of the government, yeah I think there is a good argument for being a bit more up front and that way at least that helps you when you come to the final paper, that community hasn't been absolutely surprised.At the end of the day from what we have heard from Tony Abbott and Joe Hockey, in the comments they have made since the election how bold, brave do you think they are going to be, comparing that to Howard and Costello in '96. Do you think they will really make some deep spending cuts in a budget crisis situation? Joe Hockey made the point the other day, there is actually not that much more left to sell for government in terms of priest enterprise. Sorry, government inter-- private enterprise. So there will not be any surprising recommendations in that space. I think the government probably has a more limited ambition to adopt some of the reforms than we saw out of the Howard-Costello commission in '96, the commission of audit back then.I wouldn't focus solely on the salesmanship, I think Mr Hockey has made clear he wants to look at the service provision side and I think there is a lot of scope there and I think that's where he's looking for it. The politics though, that will be the interesting trade- off. The tension between Tony Abbott and his Treasurer how far Tony Abbott's prepared to use up a little bit of political capital and versus Joe Hockey making clear - and he's got a reasonable argument, that look the government has to wind back and become smarter with what it does and that's their landing space I suppose.It will be fascinating to watch. Shane Wright and James Masola good to talk to both of you. Thanks for joining us. We will be back after the break, stay with us.

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