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The Nation - Sky News

2 December 2010

HELEN DALLEY: Hello, I'm Helen Dalley, welcome to The Nation. Well, the silly season hasn't really
started yet though there was a sign of perhaps an early onset this week. The nuclear power debate
that we had to have came and went after the Prime Minister dismissed the idea and put it off to
next year's ALP Conference saying that Labor supporters of nuclear power were still going to have a
very big job convincing anyone of changing. Federal Parliament had the last sitting for the year
and there were still no sign of an abatement of hostilities between Julia Gillard and Tony Abbott.
We had a pledge by the PM to look at the carbon price next year, we had a bit of a dismal national
accounts figures and last but not least we had a change of government in Victoria. The Coalition
took power after 11 years in the wilderness and I think the new Premier Ted Baillieu got more
publicity doing a press conference in his budgie smugglers by the pool where he does laps; maybe
the silly season really has started.

But we have a stellar line up for our panel this evening, on my left is Labor Senator from New
South Wales Doug Cameron, Independent Senator from South Australia Nick Xenophon, Editor at Large
of The Australian newspaper Paul Kelly and Liberal MP from New South Wales Paul Fletcher, welcome
to you all. Now, we did have an historic win in the Victorian election this week. No one saw a
change of government coming really until the finals polls, Paul Kelly, why was the mood swing
missed?

PAUL KELLY: I think what we see at the moment is a conflict between what I call the insider and
outsider view of politics and I think the political class to a certain extent is misreading what's
going on in the country. We've seen this now at the national level with the Liberals doing much
better than expected over the course of the past 12 months after Tony Abbott became leader. In
Victoria the Labor Party believes that the Brumby government would be re-elected, they believed the
Brumby government was the best government in this country. It's most interesting to see that both
The Age and The Australian newspaper editorialised in favour of the re-election of the Labor
government in Melbourne but the voters thought otherwise, the voters said no. I think this is a
very significant change of government. It means that after we get to the New South Wales election
next March we'll have three Liberal governments in the country and in very important states,
Sydney, Melbourne and Perth.

HELEN DALLY: Alright, before we get to what that means for Julia Gillard and the government. Doug
Cameron why did Labor lose when everyone seemed to think that they were going to win?

DOUG CAMERON: Well, I think the analysis will take some time and, you know, I think it was ...

HELEN DALLY: Do you think Paul's right that the political class was reading things differently to
the electorate?

DOUG CAMERON: I don't know, I really don't know if that's the correct analysis. I think, you know,
campaigns count, services count and all the bread and butter issues come into state elections and I
think that's what happened.

HELEN DALLY: But this is a Premier who in his concession speech, the former Premier now, he said
the economy in Victoria is the envy of Australia, it's the envy of many in the world, things were
going right for Victoria, he claimed to have created a lot of jobs. Those things, key things once
upon a time in an election, didn't seem to count for all that much this time, why not?

DOUG CAMERON: Because I still think there is this issue of services and people do feel that they
need services from state governments. There has been issues in terms of privatisation of transport
services in Victoria, it's never recovered from privatisation. It's a big problem and I think
people see that as a key issue.

HELEN DALLY: Paul Fletcher, I think you'd agree even people in the Liberal Party missed that this
was going to happen. There was talk perhaps of a hung parliament. Many on your side didn't think
Baillieu could do it?

PAUL FLETCHER: Well, I think we believed that with a determined campaign and a clear focus on what
the people of Victoria wanted that we were very much in with a chance and I think what it
demonstrates, one of the things that is significant is that people in Victoria had had the chance
to see two or three months of a federal government that really wasn't going anywhere, a federal
government that was too tied into the agenda of the Greens and they saw this as an opportunity to
make a choice in favour of a party that was focused on the concerns of the community in delivering
services rather than playing internal games.

HELEN DALLY: Alright, so you think it was very much a response to federal Labor, nothing to do with
state issues?

PAUL FLETCHER: Oh there are obviously a whole constellation of factors there but I don't think you
can ignore the fact that the people of Victoria when they came to make their decision had seen
effectively paralysis at federal level for two or three months and they'd seen an agenda which was
being dominated by the exotic concerns of the Greens rather than responding to the day to day
concerns of Australians.

HELEN DALLY: Nick Xenophon, do you think saw a paralysis at the federal level?

NICK XENOPHON: No, look I've got a slightly different take on this. I think that in the age of
Facebook and Twitter people are much more impatient. I think that's one of the, I think that
politics has changed in this country and I'd like to hear what Paul Kelly has to say about that ...

HELEN DALLY: What does that mean? What do you mean they're impatient?

NICK XENOPHON: Well, I think that the news cycle is no longer, I think 70 years ago the PM or the
Opposition Leader could go across the Nullabor to go to Perth to campaign in Perth, there' d be no
news from them for three or four days that would be unheard of. You don't hear from the PM for a
day and there's something wrong. So, I think that there is impatience in the electorate, there's a
sense of immediacy, there's a sense of people wanting action and I think voters are less patient
than they were particularly in an age of instant communication and where the news cycle sometimes
can be six hours let alone 24 hours.

HELEN DALLY: Nick Xenophon, do you think there are some very hard lessons for the Greens out of the
Victorian result?

NICK XENOPHON: I don't their actual result was that bad in terms of their vote but because Ted
Baillieu made that decision and I think Helen Kroger had a lot to do with it as well, to say we
will not preference the Greens ...

HELEN DALLY: To not preference the Greens.

NICK XENOPHON: ... not preference the Greens, I think interestingly that galvanised the
conservative support base, the Liberals, and I think in the same way that Tony Abbott galvanised
the Coalition supporters by his stand on the ETS, rightly or wrongly, I think it actually was very
smart politically and I think Ted Baillieu did the right thing politically even though at the time
I thought that they were being mugs doing it but clearly that was wrong.

HELEN DALLY: Yeah and he was criticised a lot internally in the party. Paul Kelly what did you make
of not just the move because we know he did it and it worked out well for him. Are there some hard
lessons for Bob Brown and the Greens?

PAUL KELLY: I think there are. I think it's most interesting that the Liberals decided to call the
bluff of the Greens. I think the Greens will now need to rethink their tactics. I think the Liberal
Party though will play this on an issue by issue, election by election, seat by seat basis from now
on. But there are some very important take outs. I note though that the damage done to the Greens
in this election was damaged, perpetrated by the Liberal Party not by the Labor Party. I disagree
very much with those people who say that they Green vote has peaked. The Greens are going to be
around for long period of time. They appeal to very deep elements in the Australian community and I
think these efforts to write-off the Greens are very, very premature and quite wrong.

HELEN DALLY: So you reckon it's just a thing they've got to change their strategy about how they
get, how they win seats, how they're going to get preferences but don't write them off at all?

PAUL KELLY: Well, I certainly wouldn't be writing them off and clearly the Greens are in terms of
their environmental policies, their economic policies, their social policies do appeal to a very
strong ideological strand in the Australian community. I think that there've got a loyal batch of
support that they can build upon.

HELEN DALLY: Nick?

NICK XENOPHON: Well, just say I work with the Greens in the Senate close up, we're on the cross
benches together. I think the media perception of this was a bad result for the Greens was because
the expectation that they'd pick up three or four inner Melbourne seats ...

HELEN DALLY: A fair enough expectation.

NICK XENOPHON: ... it was a fair enough expectation but once the Libs did the deal and it was a
smart thing for them to do, that was it for them, so, but they will still have the balance of power
in the Senate from July the first for one possibly two terms, maybe even longer and I think so long
as Bob Brown particularly as leader who up close he's very collegial in his approach to his
colleagues, I think that they will be a very significant player.

HELEN DALLY: Alright, I need to move on, the federal implications, because we'll talk about the
Greens a little later in the program. Federal implications, Paul you mentioned that Julia Gillard
might now face three Coalition premiers at COAG after April next year if New South Wales falls to
the Liberals as well. Would that, Doug Cameron, be much harder for her to get her agenda up?

DOUG CAMERON: Well not particularly because I think the premiers have to act in the national
interest and if Labor takes issues to COAG that are clearly in the national interest it's extremely
difficult for state premiers regardless of their political views to act against the national
interest and that's the key issue for Labor, taking issues that are in the national interest to
COAG and developing that agenda.

HELEN DALLY: Alright, well on the health issue that we saw last, you know, that Kevin Rudd fought
tooth and nail for, we did see certainly Victoria was a stand out for a while but the WA Premier
who happens to be Liberal still stayed out. Now, with two other potential Coalition colleagues they
could make life pretty miserable couldn't they around the COAG table for the Labor government?

DOUG CAMERON: Well, I think if you look at history and you see how the COAG operation was worked
under John Howard you can see that you can work with premiers of the opposite persuasion, that's
clearly the position that was adopted and I just say it's going to be difficult for premiers to
continue to hang out against more nurses, more beds, better services and hospitals, pretty tough
for premiers to really hang out next year on these key issues.

HELEN DALLY: Paul Fletcher, is it any different to when John Howard was, certainly for quite a
while, surrounded by all Labor premiers?

PAUL FLETCHER: Well, I'd agree with Doug to this extent the ...

HELEN DALLY: That's a first.

PAUL FLETCHER: ... the mere fact that you've got premiers from one party a prime minister from
another party doesn't mean you can't make progress. In fact if you think back to the early nineties
when you had Nick Greiner as Premier of New South Wales and Bob Hawk as Prime Minister that was
really the genesis of the fundamental competition reforms which have been so critical to
microeconomic reform and progress over the last 15 or more years. The important thing is what's on
the COAG agenda and driving COAG forward. COAG met four times last year it's only met once this
year and the Chairman of COAG Paul McClintock who's been quoted ...

DOUG CAMERON: (Inaudible) an election.

PUAL FLETCHER: today, well that's true but Paul McClintock has been quoted as making the point that
the Prime Minister really needs to step up and lead the agenda. In other words there's a need for
leadership, we hear a lot about reform, COAG is a vital mechanism for bringing the states along
with the Commonwealth so let's see some leadership.

HELEN DALLY: Alright, let's move on there are lots of pressures still on the Prime Minister. Nick
Xenophon, the Greens have been pushing same sex marriage and pushing along with some on the Labor
side, including Doug Cameron sitting here, will it eventually happen within the Labor government
and within Labor? Will they move to a position that is quite different from the one they hold now?

NICK XENOPHON: Well, firstly I think and Doug can correct me on this it will probably be a
conscience vote, I'm not sure Doug whether it will be a conscience vote or not ...

DOUG CAMERON: I'd expect so.

NICK XENOPHON: So, that will be interesting. So, it means that I think Liberal members, I don't
know what Malcolm Turnbull's position is but I'd imagine it would be close, well no I shouldn't
verbal Malcolm because I'm not sure what his position is, but I support civil unions, I think that
would be a reform and I'm still willing to talk and engage with those on the same sex marriage
debate in terms of marriage equality. So, I think that, you know, we'll get a vote on that probably
in this Parliament.

HELEN DALLY: Alright, Doug if you do, should it be extended out to, you know, discussion until the
ALP Conference next year or should it be done sooner. And if it does get through will you cop a
massive backlash from some of the more conservative elements of the electorate who support Labor as
well?

DOUG CAMERON: Well, I don't know where this massive backlash will come from Labor, that's where I
disagree with Paul's analysis that Labor's heartland would desert over this issue that's not been
the international experience. I live and work just outside the Western Suburbs of Sydney, I'm
pretty well known in some of those areas, people know my point of view and I'm not getting a
backlash about this issue. The backlash, if there is any backlash, are people who are just not
prepared to accept that human rights, equal rights should be in Australia and I just think that's
wrong. I don't think you should be discriminated against under the law because of your sexual
preferences, I just think it's crazy.

HELEN DALLY: Paul Fletcher, will pigs fly before the Coalition embraces this and would you rather
sort of try and put a wedge into Labor on this issue?

PAUL FLETCHER: Well, just to be clear we certainly haven't put this issue on the agenda with a view
to playing political gains. This issue was in fact put on the agenda by Adam Bandt, the Greens
Member. The Howard government was instrumental in removing many forms of discrimination that quite
incorrectly existed between ...

HELEN DALLY: But you're going to stay where you are now?

PAUL FLETCHER: ... between, well the important principle is removing discrimination and we've seen
that done on a whole range of important areas but on the question of marriage the position in the
legislation is that marriage is a union between a man and a woman.

DOUG CAMERON: (Inaudible) there's not ...

PAUL FLETCHER: That's the party's position.

DOUG CAMERON: There's not one position in the Liberal Party on this. It's clear that Senator
Birmingham has come out; Simon Birmingham has said that he supports, you know, marriage equality.
You see business now moving, Heather Ridout from AIG saying that it's discriminatory and it should
go. You see Labor, you know, right and left, it's not a factional issue, it's not a right-left
issue. It's an issue of human rights and I think that will come through.

HELEN DALLY: But, do you think Australians in many ways are more socially progressive and they just
accept these things, these sorts of changes?

DOUG CAMERON: Absolutely, I'm convinced that once this legislation goes through, when we get to a
legislative position, that it will not be an issue; it will not be an issue in Australia; the same
as in Catholic Spain, the same as in Argentina, the same as in Canada, South Africa. Why can't we
behave the same way towards our fellow Australians?

HELEN DALLY: Paul Kelly, which way do you think this is going to go?

PAUL KELLY: Oh, well I think it's quite hard to predict. I feel the Labor Party is very divided on
this issue and I think it will be a troubling and difficult issue for the Labor Party. We should
bear in mind that this issue is driven by the Greens. This is absolutely central to the Green
agenda and I think the public will see to a very considerable extent Labor following the Greens on
this issue. I also think that because it's such a benchmark issue if Labor commits to this it will
brand Labor as a socially progressive party and that is a very significant step for Labor to take.
I think there will be a political downside in relation to that, very hard to tell how significant
that downside is but I certainly feel that there are far more significant risks for Labor in this
situation.

DOUG CAMERON: It's not one of Paul's better analysis of a political situation in Australia let me
say.

HELEN DALLY: You said not true, not true, what did you mean?

DOUG CAMERON: Well, it's not true. The Labor ...

PAUL FLETCHER: (Inaudible) Labor Party on this issue is it?

DOUG CAMERON: The Labor Party through senior Labor politicians like Anthony Albanese have been
pushing to move to this position for years ...

HELEN DALLY: But you can't ...

DOUG CAMERON: ... (inaudible) going on.

HELEN DALLY: ... you can't argue that there's unity on this issue. I mean you've got the Prime
Minister saying no, no, no basically.

DOUG CAMERON: But there is a policy in place now and there's a debate about changing that policy
and I'm convinced that the change in policy will be towards a progressive policy that treats all
Australians the same. These Australians are people that are saving other Australians lives, they
put fires out, they are not some kind of terrible human being they are Australians and they deserve
a fair go and they deserve equality under the law.

PAUL KELLY: I just might make one point. Julia Gillard is on the record here quite clearly saying
she opposes a gay marriage and the reason she opposes gay marriage is because she thinks it's
inconsistent with Australia's traditions. She's quite unequivocal about that and I think this will
be a problem for the Labor Party given, given such a firm public position adopted by the Prime
Minister.

HELEN DALLY: We are going to take a very short break, do stay with us on The Nation, we'll be back
we've got lots more to discuss.

Welcome back to The Nation and with me on the panel tonight is Labor Senator Doug Cameron, Nick
Xenophon Independent Senator from South Australia, Paul Kelly Editor at Large on The Australian
newspaper and Paul Fletcher Liberal MP. Now, we're delighted to have you all here but let's get
into our next issue which is the nuclear debate. Now, it sort of came and went very quickly, Paul
Fletcher do you think this one is going to get up and is it really, perhaps, the right, their
revenge against the same sex marriage issue? Julia Gillard has deftly sort of battered it away
until the end of next year with the ALP Conference but in a sense did she leave the door open to,
even though she said oh it's going to be very hard for anyone to actually change the policy and
argue and win this argument. Was that a little door left open?

PAUL FLETCHER: Well, it does seem to be a bizarre way to be running the country and developing
policy that an issue like nuclear power in Australia gets put on the agenda by one half of the
Labor Party in revenge for the other half of the Labor Party expressing views about gay marriage
that seems like a very curious way to be developing policy on any issue. Does she genuinely want an
open debate on the topic? I would certainly be very sceptical. The fundamental issue I think is
this: when Kevin Rudd came to power we heard that there was going to be evidence based policy. If
you look at the way that in the last years of the Howard government the issue of nuclear power was
dealt with, you know, there was a very substantive report by Professor, Doctor Switkowski ...

DOUG CAMERON: Then you ran away.

PAUL FLETCHER: ... which laid out the issue. So in other words a serious attempt to look at the
issues rather than things just getting on the agenda and through some kind of random process of
internal game playing.

HELEN DALLY: Doug, was that an unfair characterisation, that it was the right sort of revenge for
the same sex marriage push?

DOUG CAMERON: I think so. You know, I've been asking for more debate in the party and one of the
big problems we have in this country in political debate, is as soon as someone raises an issue
that may not accord with the views of the majority then it's a split, it's a problem, the
government's in trouble and I don't think that's good for political debate in this country. People
want to raise nuclear power, let them do it and let's have the debate.

HELEN DALLY: Alright, is it going to be pushed under the carpet though?

DOUG CAMERON: I don't want it pushed under the carpet. I think, you know the debates there but I
think it really is an issue of economics in terms of nuclear power. I don't see the economics
stacking up; I don't see you could even get a nuclear power industry started in this country for
decades, whether we'd be in the business of being able to get the skills. These are all huge issues
for nuclear power.

HELEN DALLY: Well, Nick Xenophon, Ziggy Switkowski from ANSTO seems to think, you know we indeed
can get an industry up but it would be an expensive alternative at the beginning of the process.

NICK XENOPHON: Sure, and I think we need to look at some policy barriers. I do think we need to
reduce greenhouse gases, I think it's a good thing to do even for the climate sceptics out there,
it's an issue of risk management and if you want to reduce greenhouse gases in terms of the energy
sector by 30, 40, 50 per cent. We've got an abundance of natural gas which would be a good
transitional fuel which would keep us going I think in terms of meeting even very ambitious targets
for at least 20 or 30 years. So, I don't think you would be foolish to rule out nuclear power but
there are a whole range of alternatives out there that I think offer practical alternatives and
geothermal if in the next 10 years geothermal as a form of base load power which is virtually zero
emissions, Australia really could be a world leader in that.

HELEN DALLY: If it got to the point where you had a say even though we're going to talk later about
you will lose your balance of power in July next year ...

NICK XENOPHON: I'm counting the sleeps.

HELEN DALLY: ... yeah, would you say no way in the end?

NICK XENOPHON: No, look I think you need to look at the evidence but I want us to look at the
alternatives before we go down the nuclear path. I think we need to say that alternative methods of
energy production such as gas, such as geothermal, such as emerging solar technologies won't work
and I don't think we've got anywhere near that stage yet but it would be foolish to rule out
nuclear power. I think that would simply be bloody minded and ideological but I don't think we
actually need to go down that path for many years given the alternatives that are on the horizon.

PAUL FLETCHER: One of the problems here is that you've got Labor governing in Coalition with Greens
and the Greens do want to rule it out. They want to rule it out completely and so as a result
that's what's driving Prime Minister Gillard desperate desire to get this issue of the agenda
because she's not in a position to have an open debate about it.

DOUG CAMERON: How can you make that analysis?

HELEN DALLY: Paul Kelly do you think, do you think there

PAUL FLETCHER: It is fact.

HELEN DALLY: ... is a little window that Julia Gillard may have left open or do you think she is
dead against it?

PAUL KELLY: Oh well she's certainly not in favour of it but, I mean, I think there is a slight
window open and clearly sooner or later the Labor Party will have to move to a position on nuclear
energy which enables the issue to be assessed on merit along with other energy sources. At the
moment it's clearly not economical and the barriers are very significant in economic terms. But, if
we're looking at the restructuring of our energy sector with a carbon price over the next 30-35
years then clearly energy is got, then clearly nuclear energy has got to be put on the table and
assessed.

DOUG CAMERON: Can I just say on this issue of nuclear energy? There is a worldwide shortage of the
skills to build nuclear power stations and that is an issue and we are, whether we are a big enough
market even if we decided to do it, to get the skills here and get the imports here I would doubt
it and my view is you must never forget coal and carbon capture and storage needs to be addressed
because the future of this country is still going to be coal for a long time.

NICK XENOPHON: Do you really believe in carbon capture and storage?

DOUG CAMERON: Yep.

NICK XENOPHON: You do?

DOUG CAMERON: I think it can happen because, and I'll tell you if it doesn't happen then the cement
industry, the steel industry, the power industry's in a lot of trouble and we should not ignore
that either.

HELEN DALLY: But that could sound like wishful thinking. You want it to happen to save all those
industries but we have no proof yet that it can work effectively.

DOUG CAMERON: Well, we know it can work, it's about scaling it up and it's getting it at the right
price.

HELEN DALLY: Paul Kelly, would you have a view about that?

PAUL KELLY: Well, we know that in technological terms it does work but the great difficulty is
developing this at scale and developing it so that it's viable in a financial sense. Now, this is
...

HELEN DALLY: No one is actually using it in the world are they?

PAUL KELLY: exactly, now I mean, this is a pretty significant hurdle but there's a lot of
investment and lot of working going into this.

DOUG CAMERON: All over the world and the argument in the U.K, and I was there last year, was who
could put more money in either Labor or the Conservatives in the U.K so it's not off the agenda
elsewhere.

PAUL FLETCHER: Certainly seems a great deal more rational to be exploring the technology rather
than in some, rather than in some way throwing up your hands in horror and saying well coals a bad
source of energy we're not going to do which again is the Greens position.

DOUG CAMERON: We agree again.

HELEN DALLY: Nick?

NICK XENOPHON: I hope it can work, I really do hope it can work because have such a ...

HELEN DALLY: Carbon capture and storage this is.

NICK XENOPHON: ... huge (inaudible) of carbon capture and storage but when power industry insiders
say that it's a long way off, it's still pie in the sky for doing it at scale then I think we, you
know, I'd like to see the sort of money that's going to carbon capture and storage into geothermal
energy, into new solar technologies as well.

HELEN DALLY: Alright, well Julia Gillard has now put that off until next year, Paul Kelly is this,
you know she said that this is going to be part of her year of action that she is heading towards a
carbon price, will she deliver?

PAUL KELLY: Well, that's a really significant statement we saw from the Prime Minister this week.
What she said was is that her principle objective next year in terms of economic reform is to price
carbon, next year is the year of decision, she wants this legislated. Now, there's only one way it
can be legislated, Labor has got to legislate this with the support of the Greens and this is going
to be a tremendous political issue next year because essentially what Julia Gillard is saying is
she's stacked all her credentials on getting through a bill where the Greens, the Greens can
determine her fate. Now, will the Greens do what they did to Kevin Rudd? Will they hang out at the
end of the day and refuse to support ...

HELEN DALLY: Say it's not good enough?

PAUL KELLY: ... Gillard just as they refused to support Kevin Rudd and who will bear the political
responsibility if that happens? I think that if there is to be a bill, if there is to be a carbon
price legislated on Labor-Green votes Labor will only set a modest carbon price. What that means is
the Greens are going to have to move a long way, they are going to have to make very significant
concessions, their base won't like that. This is going to be an acid test of the authority of the
Greens and what they stand for?

HELEN DALLY: Can Julia Gillard do that?

DOUG CAMERON: Well, if any politician in the country can do it, it's Julia Gillard and she's ably
supported by Greg Combet. I've got every confidence in the Prime Minister and the Minister to take
this issue to the Greens and get an outcome. Now, look we must get a price on carbon because Paul
spoke about the political implications, the economic implications for this country are huge if we
don't get it. We will not be in the leadership in terms of research and development. We will not be
creating the jobs that are required for the future and the costs will be greater in the long term.
So, we want to take it forward.

NICK XENOPHON: Look, I think the process is interesting and, you know I've got a, I don't want to
sound like a whinger, I did try and get on the committee because the Coalition didn't want to be
part of that committee to look at climate change, a price on carbon, tried made representations and
I got a polite knock back and I think there was no room at the inn sort of approach and I just
worry ...

PAUL FLETCHER: Would you like me to put in a word for you, I'd be very happy to.

HELEN DALLY: See you later.

NICK XENOPHON: I don't know if it's going to help, Paul, but look I think, I wonder about the
process, I wonder how robust the process is ...

HELEN DALLY: To get to a price on carbon.

NICK XENOPHON: ... to get to a price on carbon. I still think some form of an emissions trading
scheme so long as it is efficient, as long as it's sustainable in terms of economic terms, is the
best way of doing it but I thought that the model that was put up last year, Doug, I thought it was
a disaster. It would have given us very little for a very high cost.

DOUG CAMERON: But you had an agenda running the whole time.

NICK XENOPHON: Yeah, yeah (inaudible), wait a minute.

PAUL FLETCHER: (Inaudible).

DOUG CAMERON: You had an agenda running, you know.

NICK XENOPHON: Sorry, I just, he's verballed me now. The agenda was you could've gone down a much
smarter design which would've meant a higher cut, a higher cut in greenhouse emissions for a lower
cost.

DOU CAMERON: It's a pity no one else agreed with you, that's the problem.

HELEN DALLY: Doug, you could argue that that debacle on ETS has been responsible for all your woes
this year.

DOUG CAMERON: Oh look, there is absolutely no doubt about it. When we walked away from a price on
carbon our political position crashed and we've paid a heavy price for that and we should make sure
we never do that again.

HELEN DALLY: Alright ...

PAUL FLETCHER: It's really a pretty extraordinary thing for a prime minister to say isn't it? Next
year will be the year of decision and delivery, I think she said. She might as well have said well
this was the year of dumping and disarray. You know, she's effectively conceding right off 2010 ...

DOUG CAMERON: You've got to do better than those old clichés mate, you know.

PAUL FLETCHER: ... right off 2010 because nothing has really being achieved but next year I'm going
to be doing stuff.

HELEN DALLY: Alright, well one thing ...

DOUG CAMERON: Stay out of the Tony Abbott hymn book, you know give us a break.

HELEN DALLY: ... one thing that she is sticking to is the NBN. Now, we've had the first piece of
legislation through this week. The release of the full business plan is apparently still coming.
There was talk of seven year confidentiality, Nick Xenophon, which you said no way to. Was that
just a try-on and then when you did get a 36 page summary were you duped?

NICK XENOPHON: No, not at all. I mean the whole issue here was firstly, it was a fiasco about this
confidentiality agreement, firstly seven years that was what the confidentiality said then it was
changed, I think, for two years and then two weeks until after the bill had been dealt with, I
mean, two weeks may as well have been seven years. What I got from the government was just enough
information, 36 pages is better than having zero pages; it gave a broad outline, plus the fact the
government will have to release virtually all of the business plan in the coming month after the
ACCC makes a determination which I understand is any day now, (inaudible).

HELEN DALLY: Yeah, alright but you have sided with the government, you have allowed this to start
happening. Why are you so convinced it's going to work and that it's not going to blow up and that
the technology is going to be fantastic?

NICK XENOPHON: But Helen I didn't vote for the NBN per se, what I voted ...

HELEN DALLY: Well, it's the first leg of it

NICK XENOPHON: But one of the issues, this was about structural separation of Telstra and I know
Paul Fletcher has got enormous background in telecommunications ...

DOUG CAMERON: And supports it.

NICK XENOPHON: ... that the issue is, the issue is when the Coalition privatised Telstra they did
it in a way that meant that Australia ended up with one of the most vertically integrated
telecommunication systems in the world, bad for competition, bad for consumers, the OECD was quite
scathing of it in years gone by ...

HELEN DALLY: Right, so it should've been separated years ago.

NICK XENOPHON: ... and this facilitates that and the NBN is another piece of legislation that will
come up. Earlier this week I made it very clear that I will not support legislation if there's
price discrimination so that Telstra's advantage otherwise will end up with another, another
vertically integrated monopoly.

DOUG CAMERON: Well, I'm told that's not going to happen.

NICK XENOPHON: Well, look at the legislation.

DOUG CAMERON: I'm told that's not going to happen.

NICK XENOPHON: The bill in its current form doesn't ...

DOUG CAMERON: Well, maybe you need to clarify that because it's not going to ...

HELEN DALLY: Alright, Paul Fletcher does have some expertise in this area. Why are you so convinced
this is not going to work because I think I've put to you before, if you were still at Optus it's
likely you would support this?

PAUL FLETCHER: The question as to whether it says the interest of Optus or any other private sector
company is different to the question of whether it is in Australia's national interest. Now, it's
been argued that Labor's plan is a good plan because it delivers structural separation, that's to
say you break up the network from Telstra's retail business and I am certainly a supporter of
structural separation, so is Malcolm Turnbull who's our spokesman on the issue. But, the important
point is this: you do not need to spend $35 billion of taxpayers' money even if your stated
rationale is to achieve structural separation. Why not just break up the company into two without
putting an enormous amount of taxpayers' money at risk because what the government is actually
doing here is they are saying to Telstra first split into two then take the network business and
junk it, dump it. That existing network, just trash it and we're going to build a brand new one.
That is a remarkably wasteful thing to do.

HELEN DALLY: They're going to use some of the same infrastructure.

PAUL FLETCHER: They're not, they're not. They are trashing the entire network. It is to be
completely overbuilt so even in those parts of Australia which are today served by the two cable
networks of Telstra and Optus which are already capable of delivering 100 mega bits per second this
plan will require that those networks be shut down so we are creating a new government owned
monopoly at enormous expense to serve even areas that already can get 100 mega bits per second.

HELEN DALLY: Is there an argument to say that you said why spend taxpayers' money that no company
has, will put the money in. Private enterprise won't do this?

PAUL FLETCHER: No, no there isn't that argument at all except for rural and remote areas where it's
uncontentious between the major political parties that there needs to be public investment because
those are areas the market will not serve in a commercial way. But except for those areas for the
majority of premises the private sector, if you structured it properly, certainly would invest and
indeed Telstra as long, as far ago as 2005 put forward a plan to do just that.

DOUG CAMERON: But, the market has failed. The market has completely failed and I just can't
understand why you're sitting here running that line when you don't believe in it and you wrote a
book called The Wired Brown Land ...

PAUL FLETCHER: Yeah, Doug, I did write a book called The Wired Brown Land ...

DOUG CAMERON: You wrote a book called The Wired Brown Land ...

PAUL FLETCHER: ... and I argued in that book that what should happen was that ..

DOUG CAMERON: ... and what did you say? You said broadband in every home, news services, video
conferencing would be common place with broadband in every home, news services would spring up,
banking ...

PAUL FLETCHER: Yes, all true.

DOUG CAMERON: ... shopping, information, education, health services would expand to take advantage
of this new widely available communications channel. That's what you said and you can't do it with
an old network, you've got to do it with a new network. You know it and all you're doing is
parroting your leader's line which is about blocking, which is about destroying and you should ...

PAUL FLETCHER: When you've finished telling me ...

DOUG CAMERON: ... you are being hypercritical ...

PAUL FLETCHER: ... what I believe do you want to hear from me ...

DOUG CAMERON: Well, I'm telling you what you wrote.

PAUL FLETCHER: ... what I (inaudible) because I'm getting pretty sick of being verballed by you and
by Julia Gillard and by a whole bunch of Labor politicians.

DOUG CAMERON: Well, I'm telling you what you wrote.

HELEN DALLY: Alright, you made that point

PAUL FLETCHER: ... because I'm getting pretty sick of being verballed by you and by Julia Gillard
and by a whole bunch of Labor politicians. I have...

DOUG CAMERON: Well, you're a politician, you've got to be, get's some gut, bit of toughness in you
on this stuff.

PAUL FLETCHER: ... don't lecture me, Doug.

DOUG CAMERON: You should not let ...

PAUL FLETCHER: ... don't lecture me. Let me tell you ...

HELEN DALLY: Okay, Doug you've had a say, let go on Paul.

DOUG CAMERON: ... You should not let Tony Abbott stand over you on this.

PAUL FLETCHER: ... stop lecturing me, Doug, and let me you what I believe in.

DOUG CAMERON: ... don't let Tony Abbott stand over you.

PAUL FLETCHER: ... I believe in competition, I believe in an upgraded broadband infrastructure and
I believe in doing it in the most cost effective and pro-competitive way. Your plan squanders $35
billion of taxpayers' money ...

DOUG CAMERON: Not true.

PAUL FLETCHER: ... it involves building in parts of Australia where there is no need to build
because there is already a network and your plan involves suppressing competition because even in
areas where there is already competitive infrastructure that will be shut down and it will be
replaced with a government owned monopoly and we see now in this latest plan that there should only
be 14 points of interconnect that even ...

DOUG CAMERON: This is about the future.

PAUL FLETCHER: ... but even the transmission is going to be a monopoly and ...

DOUG CAMERON: This is about the future.

HELEN DALLY: Alright.

DOUG CAMERON: ... you can be a luddite with Tony ...

PAUL FLETCHER: ... and ...

DOUG CAMERON: ... you can be a luddite with Tony but I wouldn't have thought ...

PAUL FLETCHER: Are we talking about policy or are we talking about cheep slogan because (inaudible)
slogan and let's look at the issues really matter here ...

DOUG CAMERON: ... I wouldn't have thought that you would've been, you know, been in that position
but you are.

PAUL FLETCHER: ... the issues that matter here ...

HELEN DALLY: Paul Fletcher, could I just ...

PAUL FLETCHER: Yeah

HELEN DALLY: ... could I just ask you. Is it your understanding, it's my understanding, that parts
of the of the network will be salvaged, will be used and in fact Telstra gets rental, if you like,
they lease those ...

PAUL FLETCHER: No, no, no.

HELEN DALLY: ... they do get rental through to 2020.

PAUL FLETCHER: There will be some parts of Telstra's ducts will used so the new fibre can be built
through those. But substantively what Telstra's been paid for is to shut down its network and to
...

HELEN DALLY: But that's the copper network to be replaced by fibre optics?

PAUL FLETCHER: and to remove its customers over to the new network. Telstra is being paid to shut
down existing network. This is a really important point.

DOUG CAMERON: (Inaudible).

PAUL FLETCHER: ... this is a deal, the deal between national broadband network company and Telstra
would be in breach of the trade practices act as anti competitive if it were not for the fact that
the legislation that has just gone through the Parliament specifically authorises the deal by
varying what would otherwise be the law. This would be anti competitive because the general
principle is that where you have two companies and one pays the other to exit the industry that
reduces competition and that is exactly what Labor is doing with its broadband policy.

HELEN DALLY: So you would like Telstra to stay the dominant player in the wholesale area?

PAUL FLETCHER: What I would like to see happening is that we maximise competition and if the
government, if the Labor government wants to build a new network then it certainly ought not to be
able through the force of law and government fiat to require the existing network to be shut down.

HELEN DALLY: Paul Kelly, is this going to get through?

PAUL KELLY: Oh, I think it will get through, I mean all the signs are that it will get through but
the point I'd make is that Labor is breaking its own solemn principles. Labor has ...

HELEN DALLY: Such as?

PAUL KELLY: ... said when it comes to new infrastructure that these decisions will be based on
proper cost benefit analysis, it's has singularly refused to subject the NBN to that analysis and
the reason is pretty clear. It's because it wouldn't stand up. One of the issues here is whether
the $35 billion ...

DOUG CAMERON: That's not clear at all.

PAUL KELLY: ... could be spent, could be spent ...

DOUG CAMERON: That's not clear at all.

PAUL KELLY: Well, this has been criticised, it's been criticised by the federal Treasury, it's been
criticised by the OECD

DOUG CAMERON: But, being criticised, but Paul being criticised doesn't make it correct, what the
criticism is and you're just making assertion after assertion with no backing, absolutely no
backing.

PAUL KELLY: Doug, why won't the government submit the NBN then to the Productivity Commission?

DOUG CAMERON: This will ...

PAUL KELLY: You tell me?

DOUG CAMERON: The NBN will be ...

PAUL KELLY: ... no you tell me why?

DOUG CAMERON: Well. Let me tell you, the NBN ...

PAUL FLETCHER: And why have ...

DOUG CAMERON: ... will be the most looked at piece of legislation. It will be under huge scrutiny
...

PAUL KELLY: Absolute nonsense,

DOUG CAMERON: ... it will be huge ...

PAUL KELLY: ... there is no cost benefit analysis

DOUG CAMERON: ... it was a ....

PAUL KELLY: ... . That is complete nonsense there is no cost benefit analysis, why?

EVERYONE: (Inaudible).

PAUL KELLY: You wanted to make an issue out of this, now you answer it then.

DOUG CAMERON: There is no need for a cost benefit analysis ...

PAUL FLETCHER: Ah but it's the stated policy of Infrastructure Australia which has been

EVERYONE: (Inaudible).

HELEN DALLY: So, Doug how is it going to be scrutinised... how will it be scrutinised, you just
said if it's not subjected to these sorts of normal business practices?

DOUG CAMERON: This is typical from The Australian, let me tell you.

HELEN DALLY: No, just leave that ...

PAUL KELLY: No you (inaudible) the issue.

HELEN DALLY: ... out of it; just tell us how it's going to be scrutinised?

PAUL KELLY: We're talking about the merits of the issue

DOUG CAMERON: Well, stop talking, I'll tell you.

HELEN DALLY: Go ahead.

PAUL FLETCHER: Stick on policy (inaudible).

HELEN DALLY: Doug Cameron go on.

DOUG CAMERON: Okay, this is going to be scrutinised, it's been scrutinised. There will be a
published business plan. There will be estimates where the Chief Executive and the chief officers,
the operating officers will need to be at estimates, this will be scrutinised more than any other
company in the country and that will happen.

PAUL FLETCHER: What have you got to hide? What are you hiding?

DOUG CAMERON: What we want to do is get on with the job ...

PAUL FLETCHER: Why are you refusing to do a cost benefit study when that stated policy of
Infrastructure Australia?

DOUG CAMERON: ... we want to build a broadband you could never do in eleven and a half years.

PAUL FLETCHER: ... the Rudd government,

DOUG CAMERON: ... you couldn't do it.

PAUL FLETCHER: ... the Gillard government set up Infrastructure Australia which is the specialised
body to manage these major projects. Its core principle is cost benefit study ...

DOUG CAMERON: ... so you can't lecture me about it, you couldn't do it.

HELEN DALLY: Okay.

PAUL FLETCHER: ... that's just been ignored.

PAUL KELLY: I think we might just finish here by noting that the Governor of the Reserve Bank in
the evidence he gave to the Parliament the other day said in this situation there should be a cost
benefit analysis that is the merit of the issue.

DOUG CAMERON: Well that's (inaudible).

HELEN DALLY: On that basis, on that note we're going to have a short break because I don't think
we're ever going to agree on the NBN. So, we've discussed that well, we'll be back with more of The
Nation after this.

Welcome back to The Nation and I'm joined this evening by Senator Doug Cameron, Senator Nick
Xenophon, Editor at Large Paul Kelly and Liberal MP Paul Fletcher. And we've just had some very
lively discussions so we all had a sip of water. Now, the new Senate, Nick Xenophon, is coming in
next July. So, you will still be a very important person until July but the Greens will take your
balance of power then. Between now and then are you planning to rev things up and keep everyone on
their toes?

NICK XENOPHON: It's only about 218 sleeps, Helen, but who's counting. Look, there's this, I'm
getting pats on the back from the journos in the Press Gallery saying, Oh well it's going to be all
over for you come July 1st. Well, I still think I can be a pesky, persistent bastard after July 1st
and ...

HELEN DALLY: So, you intend to keep very relevant and interested?

NICK XENOPHON: No, no, I just, it means that I can spend more time on community campaigns. There
are lots of things you can do in the Senate even if you don't have the balance of power and I'm
going to have a party though in the first week of July at a Greek Toverna in Canberra and you're
all invited to celebrate losing the balance of power. My staff want to call it the Nick unbalanced
party. But look, it will change the dynamics in the Senate but I think that if you're constructive
it's a question of knuckling down, coming up with sensible amendments, convincing my colleagues,
the Greens and the Coalition, to come on board and I think the Greens would be reluctant to use the
gag to shut down debate, I don't think that will be in the nature of the Greens. So, I think ...

HELEN DALLY: Alright, but you have, you know sided with the Greens more so do you see that they
will ...

NICK XENOPHON: Well, I certainly, depends on the issues ...

HELEN DALLY: Yes.

NICK XENOPHON: ... procedural issues and depends.

HELEN DALLY: Yes, so I'm just wondering how you think they will play the balance of power?

NICK XENOPHON: Well, there will be nine of them so it will be an interesting change of dynamics. I
think while Bob Brown is there he is kind of a father figure for the Greens and I think he is a
steady hand so we'll wait and see. I think there will be lots of policy challenges. I think Paul
Kelly's right, the acid test will come on some key issues but I would think that, you know I think
it will be interesting to see to what extent the Greens and the Coalition work together on
procedural issues if there are calls for say the production of more documents or opening up access
to documents on key issues, so we'll wait and see.

HELEN DALLY: Paul Kelly, do you think in fact the House of Reps might become more like we've known
the Senate there will be more of this argy bargy horse trading, deals whatever you like to call it,
but there now are a number of other players who have to be considered in a minority government?

PAUL KELLY: Oh, well that's absolutely right and Julia Gillard's great skill after the election was
her ability to be able to manage the hung parliament and negotiate effectively with the rural
independents. But the point I'd make is that it's probably the case that the minority government
just a one term phenomenon and that after we get to the next election either Labor or the Coalition
will win a government in their own right in the Reps and so the Reps, if you like, will return to
normal. But the change we're seeing in the Senate is a permanent change. The Greens are going to
occupy the balance of power in the Senate now in the long term and I think it will be fascinating
to see how the Greens evolved. So far since the election I think there've played it in a very
tactically, skilful manner, they've set the agenda effectively they've got great media coverage, I
think they've confused the Labor Party and they've left the Labor Party in a situation where Labor
is uncertain about what to do on a number of key social issues. So, it's been fascinating to see
the Greens behave in that way but we'll have to watch how they evolve as a party over the next few
years.

HELEN DALLY: Alright how, on that sort of issue how did you feel about former New South Wales
Treasurer, Michael Costa, Labor Treasurer, in his piece "Labor in Crisis' arguing that essentially
in his view Julia Gillard needs to confront the Greens not appease them?

PAUL KELLY: Look, I think she's got to take it issue by issue but I think the risk is for Labor
that it's seen to adopt a Green agenda particularly on social issues and I think that is a trap for
the Labor Party. In that sense I think Michael Costa's correct when he says that Labor can't out
bid the Greens on these sorts of social justice questions.

HELEN DALLY: Alright, can I just get Doug Cameron's view? Would you say that's not right because
you're trying to take back that area by perhaps pushing the same sex marriage issue?

DOUG CAMERON: Well we're not trying to out bid the Greens. The Labor Party has always been a social
justice party and the Labor Party just needs to make sure that the people know that we're a social
justice party, that we're (inaudible) ...

HELEN DALLY: Alright does Julia Gillard have to take on the Greens then?

DOUG CAMERON: No, I think that would be a, that's a silly analysis and I'm sure Michael Costa has
never been renowned for his tactical or strategical capacity in the Labor Party and I don't think
anyone will take his advice seriously. Confronting a party that holds the balance of power in the
Senate, in my view, would be crazy brave. You have to work with them.

HELEN DALLY: Nick Xenophon, just moving on to Julia Gillard, she's got a number of perhaps problems
that are coming internally. She's been criticised in her own Caucus, there's a view that she lacks
an agenda that's been said publically by various Labor commentators apart from internally in the
Caucus. She had to come out today and say, you know I'm in control. Is this a real problem for her?
This internal criticism and how's she going to manage it?

NICK XENOPHON: Look, I still think Labor's feeling it's way with the paradigm or whatever you want
to call it ...

HELEN DALLY: I thought we were going to avoid that term?

NICK XENOPHON: We can call it the old pantomime if you like but I think that, look I think it is
still quite problematic. I still don't think Julia Gillard has found her stride but I think it was
interesting one of the senior Labor person, wasn't Doug, who said to me on the day of the Governor
General speech when Parliament, when the Opening of Parliament said if we freeze we're dead
politically so I think Labor has to seize the agenda and argue it well otherwise they're in real
trouble.

HELEN DALLY: And they haven't yet?

NICK XENOPHON: I think there have seen some stumbles, I'm just being objective.

HELEN DALLY: Paul Kelly?

PAUL KELLY: Well, look the government has not recovered from the removal of Kevin Rudd. I mean this
is an epic event to have a newly elected Labor government in 2007 see the Prime Minister being
deposed about two years later and so Julia Gillard is struggling to establish her own agenda as
Prime Minister. She's largely inherited Kevin Rudd's agenda. A lot of what she's doing at the
moment is still Kevin Rudd's agenda and the great difficulty she's had to face, both in the
election campaign and since, is to explain why on the one hand the party repudiated Kevin Rudd but
is still essentially running on his agenda. It will take a while for Julia Gillard to establish
what she stands for but she's got to do that and she'll stand or fall on her ability as Prime
Minister to define her own agenda and I think she's got a fair way to go yet on that.

HELEN DALLY: Very briefly Doug Cameron. You ... go ahead Paul.

PAUL FLETCHER: Add to that, I think the fundamental problem right now is that Labor's internal
problems mean that Australia is not getting the government that it deserves. We're seeing all of
this internal focus while there's a whole bunch of issues that really need to be addressed. If you
look at what the Governor General said in the speech that was written for her, the Opening Address,
there was a lot of talk about productivity, in improving productivity, microeconomic reform, all
makes good sense but you've got a government in Coalition with the Greens who are fundamentally
opposed to economic growth. We've got to address that issue and that is really important.

HELEN DALLY: Alright, just briefly because I'm going to get to you and your side in a minute. Doug
Cameron, briefly, you've argued you don't want zombie politicians. You want people on your side and
every side to be able to, you know, speak their mind. We've also had today in the Financial Review
Mark Latham has come out and said essentially, you know, I guess causing trouble again saying that
the New South Wales right is destabilising Julia Gillard's leadership and they're going to dump her
and put in Chris Bowen and then he had to spend half the day today saying, no. no that's laughable.
What's your view about that? Aren't they all destabilising?

DOUG CAMERON: There's only one person you should pay less attention to than Michael Costa and
that's Mark Latham.

HELEN DALLY: Alright well answered. Now Paul Fletcher I'm going to get to you. Lessons for Tony
Abbott and I guess there's a couple of things. Can he spend next year not being just a great
debater and a knocker?

DOUG CAMERON: And bring back WorkChoices?

PAUL FLETCHER: The, I was just going to say it's always interesting to hear Labor people sort of
attacking each other and we do seem to see an enormous amount of that ...

HELEN DALLY: Alright, now just on Tony Abbott.

PAUL FLETCHER: One Tony, what tony has shown is a proven capacity to deliver a very clear
disciplined message and he was extremely effective at that, in the election. We produced a result
which ...

HELEN DALLY: Can he not be a knocker and show that he has credibility on policies and leadership
issues?

PAUL FLETCHER: Well, first of all I just reject you characterisation on Tony as a knocker. He is a
very experienced politician, he was a Cabinet minister for a number of years, he's got proven
policy credentials and clearly we are planning to build in terms of the ideas that we put forward.
We've put forward a lot of ideas; we've got more ideas to put forward. Tony himself has been
talking about the policy development process. But we have in Tony Abbott a leader who is somebody
who develops and communicates very clear messages and it focused on the concerns of Australians and
not ...

DOUG CAMERON: What policy?

HELEN DALLY: Just on ..

PAULFLETCHER: ... and not internal party games and that's one of the big differences between the
two major parties.

HELEN DALLY: Alright, in our last minutes, I mean he has indicated that he wants to stay the course
on policies whether that's because he doesn't want to get caught short if there is an early
election, but some in the party do want to talk about moving forward on industrial relations. Not
to go back to WorkChoices and perhaps that's what he's worried about. Can he do that and get the
party to go with him or will these voices perhaps still talk and he'll say no, no you have to be
sort of pushed under the carpet essentially?

PAUL FLETCHER: Look, the Liberal Party has market place of ideas and there's plenty of ideas being
put forward, that's important. We have a policy development process and the diversity of people
within our party room is a strength. The energy to develop ideas is a strength and it's a rule
differentiated between our side of politics and the government.

HELEN DALLY: Alright, 10 seconds Paul Kelly: I'm going to ask you to just, what are the real
challenges for Tony Abbott next year?

PAUL KELLY: Well, at the moment the government's the issue, the government's the issue because the
government's in trouble. Now, Tony Abbott doesn't want to disturb that. He doesn't want to make the
Opposition the issue again as it was under Brendan Nelson and Malcolm Turnbull that is his bottom
line.

HELEN DALLY: Alright gentlemen we are going to have to leave it there. Thank you all so much for
joining us on The Nation. Senator Doug Cameron, Senator Nick Xenophon, Editor at Large Paul Kelly
from The Australian and Liberal MP Paul Fletcher, you all deserve a great holiday, you've had an
amazing year so happy festive season to you, and thank you for joining us for The Nation.

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