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(generated from captions) PM Agenda this game of PM Agenda this game of political brinkmanship over

asylum seekers continues. Julia Gillard wrote to Tony

Abbott today. He has written

back accept can her offer of

a briefing with departmental

experts on the options for

offshore processing. We'll

take a look at that. We'lling

also be having a look at the

NSW budget handed down today,

the increase in mining taxes

from the Coalition Government

break. there. Stay with us after the

Good afternoon, welcome to

the program. I'm David

Speers. The Prime Minister is

in Auckland this afternoon

for talks over the next

couple of days with Pacific

leaders. Among them the

President of Nauru, Marcus

Steven but Julia Gillard says

she won't be raising the

issue of process asylum

seekers with him or any other

Pacific leaders while she is there. This comes of course

as the issue remains the matter of an extraordinary

battle of brink manship between the Prime Minister

and the Opposition leader

over where a sylum seekers

should be processed. Today

the Opposition leader has

hardened his opposition to the Malaysian plan which was

knocked out by the High Court

last week. Tony Abbott says

he is happy to agree to

changes to the Act to allow jaof shore processes to

continue. He's happy to talk

to the Government about that.

It seems he may only agree to changes that allow Australian

run processing of psychs as

happened in Nauru under the

Howard Government's Pacific

Solution. I don't like the

Malaysia people swap. That

was a bad policy and it seems

that now that the High Court that now that the High Court

has spoken the Labor Party

doesn't like it either. The

only person who still has a

good word for the Malaysia

people swap is Chris Bowen

and the Prime Minister

herself. Well today the

Prime Minister wrote it

leading offering him letter to the Opposition

briefings with senior dealtal officials on their analysis

of the policy options now available. This afternoon

Tony Abbott wrote back this

letter. He says I'm happy to

accept your offer and request

that the briefing take place in Brisbane tomorrow afternoon. He goes on to

spell out his interpretation

much the High Court ruling,

that it's okay to sell psychs

to Nauru. But says he is

happy to work constructively

with the Government. If there

was impediments to offshore

processing he's happy to see them removed. He urges the

Prime Minister while she's

Pacific Islands Forum to talk there in Auckland at that

to the leaders of both pap

with a New Guinea and Nauru .

Julia Gillard doesn't have

any proposals to put them to

them. Caucus will meet in

like ly Canberra. Until then it's un

like ly we will see any final

decision taken. What will she

be discussing while she's

there in Auckland over the

next couple of days. Here

were the remarks from the

Prime Minister to the

awaiting media when he

arrived in Auckland. I've

just arrived in Auckland. I'm here to the the Pacific

Islands Forum. This is the

40th year of the forum. We've

always been a strong support

er and the for um continues

to have a contemporary

meaning and relevance. I'm looking forward to the

discussions over the next few

days. There will be a range

of issues raised but I will

be particularly focussing on

four areas. First on the question of economic growth

and jobs and education. As I

say in Australia when I'm

back home, having a decent

life starts with the

opportunity to get a great

education and to get a job.

The same is true in our

region, so I will be

particularly focussed on

education and skills, on

labour mobility, on trade and

the power of trade to improve

job opportunities, and on the

question of remittances. The

ability of people who are

working in another country to

send money back home in a

will cost-effective way. Second I

will be focussed on the

question of development aid.

A quarter of Australia's aid

goes to the Pacific region

and around half of the aid

that flows to the region

flows from Australia. We have

the Cairns compact and we

will continue to work on that

because we want to strengthen

the effectiveness of our aid

in the region. Third, I'm

intending to focus on climate

change. This is a meeting

that brings together some

nations that are most at risk

from climate change, they are

small, they are low lying and

most at risk from rising sea

levels. Fourth, and finally,

I will be talking to the

nation's participating in

this forum so that I can

reflect their voice when I go

meetings around the world. to the G20 and to other

meetings around the world. So

they are my objectives for

the Pacific Islands Forum.

Can I say too I'm very

pleased to be back here in

New Zealand and I'm looking

forward to seeing Prime

chairing and leadership of Minister John Key and to his

this important event. This

has been a year in which

Australia and New Zealand

have been brought and bonded

incredibly closely together.

We are always family for each

other, but that family

relationship has clearly been

shown this year as we have

stood by each other in times

of trouble. For us our summer

of natural disasters with

floods and cyclone, for our

friends in New Zealand the shock of Christchurch. This

is my third visit to New

Zealand this year which I

the think shows the strength of

the bond that is always

between us but has been

during the course of this particularly on display

year. I'm happy to take a

couple of questions. Do you

plan to speak to the Nauru

President about building a

centre there? I'm here for the Pacific Islands Forum and

I've just outlined my

objectives. I'm not intending

to raise the issue of people

smuggling, obvious ly if

leaders want to raise the

issue with me then I will

discuss it with them. It is

premature for me to be

pursuing that in this forum

given the High Court case of last week and that the

Government is still preparing

its response. Are you dis appointed that today's poll

shows that less than a

quarter of Australians are

happy with the job you're

doing as Prime Minister. I

don't do this job as Prime

Minister because I want to

see it reflected in opinion

polls. I do it because I want

to see what's right for the

nation's future, that's a

focus on jobs, a focus on

opportunity and a focus on

making sure that no-one gets

left behind. That's what's

driving me and I'll continue

to do it. Democracy isn't

about looking at fortnightly opinion polls. It's about

making the decisions that making the decisions that

give people opportunities and

prosperity today. Things like

getting a job or getting an

apprenticeship and the

benefits of opportunity and

prosperity tomorrow and

making sure that we are

organising our nation so we

aren't seeing people and

regions left behind. And I do

as Prime Minister

particularly understand at

this phase of our economic

growth and development that

there are many Australians

who feel that they are at

risk of being left hipped or

the industry they work in is

at risk of being left hipped

or their region is at risk of

being left behind. Managing

our economy so we see growth

and opportunity and jobs right around the nation is

what I'm pursuing and what

I'm focussed on. Do you

think you need to change your

sales pitch. Sorry? Are sales pitch. Sorry? Are

you happy with the way...

What I judge myself by is

making sure that we are

achieving the vision for our

nation's future that I aspire

to. People will judge that at

the 2013 election. That's

their democratic right and they'll go into polling

places then and pass their

votes. For the time in

between I'll be continuing to

strive to realise that for

the nation's future. I came

into politics driven by a

vision of opportunity for

all, it starts with a great

education, it must include

the having the ability to get

a job. That's what's driving me. The Prime Minister

talking to reporters after

arriving in Auckland this afternoon. She might be

across the Tasmaniaman but as

we've seen there the leadership questions have

followed her. The poll

numbers today we do have to

mention, they are miserable

once again for Labor. We've

seen the primary vote stay

steady on a pretty ordinary 27%. At least it hasn't

fallen any further for Labor

after the week that the

Government has had. It's safe

to say 27%, will not back

another party. Julia Gillard

has suffered a further hit

herself. Her approval ratings

has deteriorated further.

Rubbing salt in the wound you

can see Kevin Rudd standing

at preferred Labor leader

continues to rise and rise. Julia Gillard's Ministers

today were rallying around

her dismissing these bad

polls and emphasising their

leader's strength. We've got

a good leader in Julia

Gillard. Her only interest is

in the national interest and

that means making tough

decisions today for the

securing of the future of

Australia tomorrow. That's

not always popular. I can't

think of anyone better to

tough out a difficult

position than Julia Gillard.

I strongly support the Prime

Minister and her very

determined efforts to work

the Government and the

country through a series of difficult policy challenges

that we have. Julia Gillard

is tough as nails. She's up

for the job because she

understands the importance of

these very significant

reforms for the long term

national interest of this

country and she's going to

fight very hard for them.

She's a leader that's got the

party's support one hundred

per cent. Anthony Albanese

also had an interesting

explanation as to why Tony

Abbott is doing so well and

the Government so poorly. He

believes it's because the

media is stuck in election

campaign mode. It is very

unusual that in the first

year of a term that you have

the daily media cycle as if

it is an election campaign. Those circumstances are different from what would

normally be the case in the

political cycle one year in.

That has contained the

dynamic. So that you have,

you know, a grab as opposed

to - and the grab from the difference from Tony Abbott

is usually just negative, the

grab from the Prime Minister

is going about doing her job.

There you go. After the

break we'll see just how the

Coalition is reading these

poll numbers, how confident

it now is, and indeed where

it does stand on psych. We'll

be talking to the ncial's Senate leader Barnaby Joyce. Stay with us.

Welmany come back. Time to

check in on the latest news headlines. Here's Vanessa.

headlines. Here's Vanessa.

Police are negotiating with a

man who's holding his

daughter hostage in an office

in Sydney's west. The man

entered a building in

Parramatta just after 9 this morning claiming to have a

bomb in his backpack. Several

streets have been cordoned

off as negotiators try to

talk to the man who's been

seen shirtless and wearing a

barrister's wig from the

window. Businesses have come

out in support of a NSW

budget describing it as

strong for challenging times.

The NSW Government has

forecast a budget edeficit

for 2011/12 but says it will

return to surplus in 2012/13. Meanwhile the Opposition says

there are some hidden losers

with pensioners, carers and

new families losing out. Prime Minister Julia Gillard

has arrived in Auckland for

talks with Pacific leaders

over the next two days. Ms

Gillard says she won't be

raising the prospect of

sending asylum seekers to

Nauru. Tony Abbott has harden

ed his criticism on the

Government's so called

Malaysia. The Government's

primary vote is stuck at 27%.

That's compared to the

Coles's 50%. -- Coalition's 50%. The Reserve Bank has

left interest rates unchanged

at 4.75%. Glenn Stevens cited

uncertainty in the global

markets and weaker near term

outlook. Most economists had predicted rates to stay on

hold. A popular West

Australian beach has been reopened following a shark

attack that killed a 21 year

old surfer. Carl James burden

was kill ed when a shark bit

a large part of his body at

bunker Bay in the south-west.

The victim's mother flew in

from the Gold Coast today paying an emotional tribute

to her son on the beach where

he die ed. The weather

tomorrow, rain in the far

south, sunny in the west.

Thank you Vanessa. More now

on the Pacific Islands Forum

as we saw a little earlier

Julia Gillard has arrived in

Auckland this afternoon. It

formally gets under way

tonight. We heard what the

Prime Minister's priorities are but what about the host

of this forum, the New Zealand Prime Minister John

Key. Kim, what does John Key

want to get out of this forum

over the next couple of days?

What the New Zealand Prime

Minister certainly wants to

focus on all the basics,

things like tourism, economic

development, financial aid.

What he probably can't escape

is fedgeie, John Key has said

what he doesn't want is for

fedgey to dominate the talks

here. In reality though he

probably has very little

choice in talking about Fiji,

he did say today he would

have to talk about Fiji in

bi-lateral talks. He's going

to have to talk about the

Pacific nations and their

stance towards fedgey. John

see today saying he thinks

that support for New Zealand

and Australia's stance to

remain excluded throughout

the forum. Fiji has been working on some of those

smaller states. That will be

interesting to know. We know

John Key met ban key moon

this afternoon in Auckland.

What did the two discuss? We haven't been able to hear too

much about that. There were

some round table talks that

we're still waiting to hear

back about. He did want to

talk about general things

with Mr Ban and also things

around the nations in

general. He wanted to talk

about Fiji's exclusion and

all those terms in financial

aid. New Zealand has been all

last night and today with new announcements for the Pacific

nations, things like power

stations and things like

that. They are meeting over

the next few days and tonight

the leaders will be having a dinner hosted by Prime

Minister John Key. They're

being welcomed right now.

Then they go on for a dinner.

There's a formal opening

ceremony for the forum. Then

behind me in very tight

security these issues will be

thrashed out in the next few

days. Thanks so much for

that. Of course we'll be

following this over the next

couple of days. Keeping an

eye on what comes out of

those talks but the Prime Minister's position on asylum

seekers which does remain

the negotiations continue undecided at the moment while

over the Government which way

forward, Malaysia, Nauru or

indeed processing asylum

claims here in Australia as

the left of the Labor Party

and the Greens are demanding.

What about the Coalition,

what's the bottom line for

them, are they prepared to

support changes that would

allow them to be sent to

Malaysia, some have said it's

a bad idea from the start.

What did they make of the

polls earlier today. I caught

up with Barnaby Joyce. Have

to be honest, Speersy, right

at the start I wrote an

article in the Canberra times

saying that this was a bad

idea. There was am necessarity reports out

talking about how an illegal

immigrant into Malaysia is a

corpral offence, I think it's

two strokes of the rattan,

women sold in prostitution,

blokes basically sold to

perform labour on fishing

boats, children going on to

the streets. I thought as a

raving right winger, even for

me this was a bridge too far.

I could never work it out.

That's still your view, you

wouldn't support anything

that does see boat people

sent there? I want to make

sure that people are looked

after. The thing about Nauru

we had far great oversight,

by reason of our

proportionate size to Nauru,

the own reason that Nauru had

the compass itty to chaeck

their lention lakes. We can't

enforce that on Malaysia, it

has a completely different

judicial system. It has the

aspect of Sharia law which

they are I will inted to,

that's their culture. I don't

know how we'd go making the

Malaysian people want to go

down that journey, they would

see it as Australia's problem. The question for

the Coalition now is do you cooperate with the Government

in changing the Migration Act

which would allow them to

look at offshore options,

including Malaysia. Not only

that, I remember suggesting

the same in a conversation

with Tony, we've got to be

part of a process of finding

a solution, I'm so happy that

Tony is doing precisely that.

It is self-et ultimately it

will be our piece of

legislation we will have to

deal with as well. That

could ole Labor then to go

with Malaysia at the same

time. They'd have to still

get the honourable judges of the High Court to agree to

it. 6 of them have said no.

If you change the Act that's

not a problem. You still

have to get it past them.

They're going to look at the external treaties the

Malaysia legislation, does it comply with your

international agreements on

the rights of refugees, and

it's something I believe we

can do in Nauru, it has

happened in the past in

Nauru, the statements from

the High Court gave no

indication whatsoever that

Nauru wouldn't work. So I

think that Nauru would be the

easier option. But for the

Coalition you're prepared to

help the Government change

the Act so that it's up to

them where they go for offshore processing. If

we're helping them change it

that is the statement we've

made. It's up to them to come

up with the ideas that we

have. I think it's a fair

statement that any Opposition

gifles to the Government that

we are prepared to work with

you on this one. If they

don't work with the National Party an the Liberal Party

they're going to work with the Greens. I don't know what

that amounts to, probably a

bridge from wherever into

Australia with no questions

asked. Let me ask you about

industrial relations. There's been growing support from

those in industry for

individual contracts to be

returned with a no

disadvantage test, so not

quite as far as WorkChoices

went. Is that something that

you're keen on? It's up to

the peak industry bodies to

argue their case. I will say

with the respect of the

Australian people, that the

last election that we laos,

we lost because of our

industrial relations policy,

so we cannot go back to the

policy, the Australian people

have categorically said they

didn't want. Whether there's

combinations, permutations,

edges of minutiae around the

enles, that's a discussion

I'm looking forward to having

on late line, on Sky, everywhere else, we will

watch the discussion. We

respect the views that the

Australian people delivered

at the last election we lost.

That is the reason why the

Labor Party is in the disras

tus position at the

pollings. It's not so much minutiae, this question of

whether you allow individual

contracts between an employer

and an employee that's

separate to an award, and a

union collectively bargain ed

award, that's pretty

fundamental change. It's not

our policy either. That is

not the Coalition policy, so

they have to argue their case

and at this point in time the

Coalition policy is quite

explicit, it doesn't include that. Tony Abbott has

suggested an interest in

revisiting individual

contracts. Are you saying

that that's something you're

keen on or not. I'll be

looking forward to their peak

industry bodies arguing

theiris ca. I will be making

sure we respect the views

that the Australian people at

the last election where they

voted on an industrial

relations policy, making sure

what we suggest is not

something they voted

against. On the carbon tax

the Government remains

committed to this of course

but the polls today show that

Julia Gillard is in deep

trouble. Is the next election

already won for the

Coalition? No it's not and

the it's not Julia Gillard

that's in trouble. It's these

dippy policies they come up with, they're in trouble.

Julia Gillard as a person is probably an easy going

person. I wouldn't mind

having her around for tea,

but the issue is the carbon

tax, it's just nutty, this

idea that we're going to cool

the planet from a room

council here, and end up

sending overseas to what

obviously will be scams.

These nutty ideas, the

Malaysian solution which

wasn't the solution, on the

back of the East Timor

solution on the back of closing the live cattle

trade, and then all the bits

and pieces like smarties on a

Christmas cake, the war

against obesity, the 2020 summit, the Australian people

get to a tipping point,

they've reached it, they said

we think you're totally and

utterly in competent. Last

week we borrowed an extra

3,200 million particulars.

Yet the same people say that

Craig Thompson is doing a fine job say don't worry

about the debt. Would Labor

do any bet er with Kevin

Rudd. They're damned by

their own words. They said he

was impossible to work with and wasn't competent enough to be the Prime Minister.

What they're now saying is

that person is doing a better

job than Julia Gillard. As a Queenslander do you think

they might be better in had

that state if they went back

to him? There's a partisan

sense in Queensland that Mr

Rudd would be the only one

that would hold his seat,

that doesn't say much for the

rest of them. The Australian

people have seen Mr Rudd, of

seen how he works. I think the Labor Party would prefer

to chew their arm off rather

than climb back into bed with

Kevin. Does the Coalition

fear any other candidate there more than Julia

Gillard, Stephen Smith, Simon

Crean, some of the other

names being mentioned.

What's in our armoury, we're

not up against a candidate,

we're up against policy,

whilst they come out with

carbon taxes, mairnan

solutions, closing down the

live cattle trade, the marleg

basin, why they work at the

behest of the Green, their timetables, ideaologists.

That is the greatest arrow,

not the leader. The leader is

a mere figurehead for a whole

myriad of debagles. On your

own electoral prospects, you

were keen to move to the

Lower House. How is that

looking at the moment. What's

looking most likely. The

electoral council have a

preselection and hopefully

I'll be favourably looked at

in that preselection and be

given aed nod. Where that is I don't know because that

preselection hasn't happened.

I do have every intent to go

to the Lower House. Aye

stated that. I've always

stated when I came to the

Senate I'd do one term

possibly two. It's up to the

will of an electoral council

as to where that is. Whether

it's in Queensland, where

there's a current National's

MP sitting or whether New

England, Tony Windsor. One I

live in, one I grew up in,

they would be the logical

choices. As soon as you say I

endo I myself to represent

these people, these people

say no, that's our job to

pick you, not your job to

launch yourself at us. I'm

going to respect the people

and say you make the decision

whether you want me or not.

They might tell me to stick

it up my jumper. The chances

are you will be in the lower

house after the next election. I'm intog to make

any sphwefr endeavour to make

sure that happens. Every

career you have, whether

accountant, butcher's shop,

you try to do your very best,

go to the extent of your

capabilities, I think in this

job in this parliament the

nation asks of you it's not

about being egotisticalcal,

it's trying to do the best

job, that's what I'll try to

do. When you get to the end

of your career, you can say I

ran as hard as I could. That

will mean Barnaby Joyce,

deputy Prime Minister. That

is a step a long way down the

track. I genuinely say that

Warren Truss is going to be a deputy Prime Minister. He

knows his stuff. He hasn't

got a high media profile. He

acknowledges that, the job he

has as a deputy, safe sort of

hands in the cabinet is

crucial. I need him for our

nation to be there. Thank

you. You're welcome. The

National's Senate leader for

now, Barnaby Joyce. Stay with

us after the break we're

going to have a look at the

NSW budget. What's the political fallout. Stay with

us.

Welcome back. The NSW

Coalition Government handed

down its first budget this afternoon after being swept

to power in a landslide

victory earlier this year.

Treasurer bared bear is

saying they will dip into

deficit in the coming

financial year before returning to surplus. He's

going to be spending billions

more on infrastructure but

cutting thousands of public

sector jobs. He's also

increasing mining taxes. This

has prompted claims of

hypocrisy from Labor.

Particularly after Tony

Abbott railed against the

Labor Government's plans for

mining tax. Coal royalties in

NSW will rise by almost a

billion dollars, a cost that

the mining companies will

pass on to the Commonwealth

though. This is part of the

mining tax deal done with the

Gillard Government. Here was

the Treasurer explanation

what he's doing on this

front. Make sure who no

excuses to asking Canberra to

contribute to the costs of

the carbon tax to this State

because as we've seen, I presented the financial

position, you can see the

challenge in front, we're not

hiding anything. They are the

challenges we're facing. In

that context for Canberra to

come and say we're going to take another billion dollars

and rip it out of you and by

the way in Victoria we're happy to give you

compensation so places like

the French Government can rip

$800 million back to France.

That's not fair. To do this because the carbon tax is

going to leave NSW worse off

it means that the

Commonwealth will have to

pick up the bill. Here was

the reaction from the federal Treasurer. Most importantly

particularly for NSW is that

we are going to provide

funding for critical infrastructure in mining regions. If Mr O'Farrell

wants to take this action

that will mean less money for

sphrts in places like NSW.

The State political editor for 'The Daily Telegraph'

when you win a land slaoitd

victory your first budget

should be the one where you

make the unpopular decisions

then you have a few years to

win support. Is this budget

tough enough? No, it's

absolutely not. David, I

think there will be a lot of

people who are hoping the

O'Farrell Government would

undertake meaningful reform

who will be dis appointed by

this budget today. He's axing

5,000 public service jobs

over four years, but in 2005

Morris Iemma did an audit and

at that time he aexed jobs

over two years, for O'Farrell

to be doing less than a lak

did, it's really not a good

look in their first year when

they've got a massive

landslide and the ability in

authority to make some tough

decisions. When Geoff Kennett

got in he axed 50,000 public

servants. I don't think

there's any doubt that we

have a bur ock cy in NSW. I'm

surprised that they've

stopped short here. That

5,000 is less than Labor's

Morris Iemma announced he --

Iemma he'd do, what seems to

be the easy option of raising

the mining loyalties

royalties. Beyond that where

are the cuts. There's also a

change in stamp duty? That's

the most politically damaging

thing they've done. They've

said previously in NSW as

with other states if you're a

first home buyer, up to

$6,000 for the home, you have

no stamp duty, there a a

concession there. That will

now only exist until January

1 unless you're buying a

newly constructed home. And

the theory according to Mike

Baird is that it's a bid to

stimulate the flagging

housing market and to

essential ly encourage more

homes to be built. But in

doing so... ? Sydney, maybe

on the outskirts where there

are new homes being built or

apart ment blocks I suppose,

how that's going to go down

for first home buyers in

Sydney. Like a led balloon.

I've no idea why they're

doing it. It just seems to me

there are a lot of other

tough decisions they could

have made other than this.

There is a danger with this

that it could actually create

a spike in the hoisting

market up until January 1

when they introduce it, then

a slump. That's the real

danger for them. That's the

last thing Sydney needs at

the moment. Their argument is

we had to make some tough

decisions and this concession

artificially inflats prices

in a. That might be the case

but this is the wrong time in

the economic cycle to rip it

away. Where are the

positives. They are talking about infrastructure, we're

going to fix all these road

and rail problems in NSW xgts

what are they doing there? I

think the positives are yes,

they are getting on with the

north-west and south-west

rail, there's been a shortage

of getting on with infrastructure projects under

Labor. They're also

privatising Port botany which

I think isn't a bad move, so

those are the good things

that they've done. But I

think in not going hard

enough in terms have cutting the public service and in

terms of this home buyer's change, the stamp duty

change, they've undermined a

bit of that. Really you

wonder, they set up

infrastructure NSW to look at

what projects to go ahead

with, now they've got very,

very small surpluses after the deficit this year, so

where is the money going to

come from to fund

infrastructure. In a way it's

what happened with Kevin Rudd

David, when he introduced Infrastructure Australia and

then found there was no money

to actually build projects so Infrastructure Australia sits

there not really having much

of a function. That's the

danger for O'Farrell here,

that infrastructure NSW could

play a similar role. Just

finally, the economic outlook

for NSW, it's a very

important state for everybody

to see it perform well. How does the Treasury see it

going. I think they've got

gross product around the 2%

mark. Again you would wonder

why they would pull apart a stamp duty concession when

they want to stimulate the

housing market. They're

saying we'll get new homes

built. I'm not convinced

they'll get that many new

homes built. I would have

thought some sort of new stimulus would be the way to

go. Essentially it's not

looking good for NSW. Really

there's going to be a lot of pressure on this Government

to sell electricity assets to

get some infrastructure

built. That kettle of fish

being looked at again. We look forward to your coverage in 'The Daily Telegraph'

again tomorrow. Thanks

David. Of course they still have quite a long time before

the next election. Fixed four

year terms mean even if this

doesn't go down terribly well

with some settingors there's

always time to turn this

around for NSW. Stay with us

after the break, the very

latest Sky News. Live Captioning by Ai-Media. www.ai-media.tv.