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(generated from captions) Ian Thorpe has confirmed he will

only target the 100 and 200 metre

freestyle events in his comeback,

ending any hope of winning a third

Olympic gold medal in the 400 metre

eventful stop he is back in Sydney

to work with the Australian head

coach and says he is delighted with

his progress. I look more like a

swimmer now. I didn't realise that

I had dropped as much weight as I

have, but it is kind of a reminder,

especially when I'm in the pool, it

feels right, how I used to do this. The five-time Olympic gold

medallist recently completed 10

days of high altitude training in

Switzerland under his coach.

A quick look at the weather:

PM Agenda is just moments away, and

here is David Speers. After the

break, we will be talking about the NBN with the Communications

Minister, Stephen Conroy. We will

also look at Joe Hockey's Budget

reply at the National press club

today. Does the Coalition have a

convincing argument when it comes

to the economy and Budget management?

Welcome to the program. It was an

the government, because the historic day today, we are told, by

National Broadband Network was launched on the mainland, in the

north west New South Wales town of

Armidale. The importance of the NBN

for the government and its need to

talk it up cannot be underestimated.Government badly

needs to deliver something positive

for the nation. Despite questions

over the pricetag, the idea of

high-speed broadband is a pretty

popular one, particularly in the

independent members signed with bush. It is the main reason why the

Labor. It was in Tony Windsor's New

England Electric today the launch

schoolkids, lofty speeches about was staged, complete with

revolutionising the future and a

big gold button. Three, two, one!

The Prime Minister spoke of how the

NBN will deliver new health,

education and other services to all

Australians, not to mention movies,

TV and other goodies. It will take,

however, up to nine years for this

to be rolled out across the country.

Right now we are seeing test sites

like the one in Armidale. But Julia

Gillard believes this does give his

-- give her something to point you

in and the two critics of the NBN.

Minister, thank you for your time.

You are in the electorate of Tony

Windsor. Remind us why Armidale was

chosen for the first mainland

launch of the NBN? The NBN selected

the site is nearly 18 months ago on

the basis of applications from

local communities, and they chose these sites based on engineering,

different apologies, demographic wanting to look at all the

issues, high-density, low density,

regional towns, University

applications. These selections were

done long before the last federal

election and long before the seat

of New England became a very talked

about electorate. That is a nice

way to put it. At the moment I understand there are only about

seven customers as this test gets

underway in Armidale. Is that

enough to really test? What sort of

number will get to? The take-up

rate of Armidale is 88% of people

wanting the NBN connected to the

side of their homes. That doesn't

necessarily mean they will get the

service. They have asked for it to

be connected. We are testing,

making sure the equipment works,

all of the connections here and

back to Sydney and Melbourne, where

the operations centre, are working.

Over the next few months more

customers will come on to test, and

then from December, we have had 13

companies register to start

approaching companies. We will

start to see offerings to customers

as the network becomes customer-

live, with the available prices

being offered. The point is it is

one thing to say plug-in my house

to the NBN. It is another when you

actually find out the price. Can

you give an idea of what the

companies will offer? We have put

our wholesale prices to them market

that start as low as $22 wholesale,

then they move up depending on how

fast people want upload and

download. What we're starting to

see is offerings coming to the

market place. The individual

companies are very coy about

revealing their prices. There will

be a lot of competition, with 13

companies register to test and

trial in Armidale. We expect a fair

bit of competition. They just won't

tell us what they will offer

because it is very competitive. The

price we do know is the cost of

rolling it out nationally, $36

billion. The Opposition today said

again this is too expensive.

Malcolm Turnbull says you can

achieve a similar result by rolling

out fibre cable to within 1 km of a

home and then using copper. Malcolm

knows that is not true. You cannot deliver ubiquitous, high-speed

broadband to me today's

applications. Malcolm knows those -

- that as new applications are

invented over the next years, you

cannot deliver the quality of

service, you cannot give equivalent

service to residents in Armidale if

you build a fibre to the node

network. Let's be very clear.

Malcolm Turnbull knows that is not

the case. He is not the only one

who clearly does not believe fibre-

optic to the home is the way to go.

Obama's administration has gone There are US experts. Barack

with a wireless option instead,

used to roll out 4G wireless. The

wireless plan was plan B. If you

talk to Obama's advises who were

there originally, their plan a was

to try to roll out fibre. They just

couldn't afford it and could not

get Congress to approve the rollout.

You are still going to get 100 Mb

per second with this technology.

very clear. International That is simply not true. Let's be

technology experts, from the

inventors of the Internet and

different companies, with Telstra

and Optus, they will tell you the

same thing. Wireless is a

compliment to fibre. It cannot

match the performance, it cannot

deliver the speed that fibre can

deliver. They are complimentary to

the NBN. We desperately need more

spectrum which is why we are

closing down the analogue signal

and we will auction off more

generation of wireless services. wireless broadband for the next

This government is providing

wireless spectrum so we can get the

great new services that will come

on wireless, and we are also

building the fundamental backbone

of the network, the fibre network. Just to be clear on wireless,

because this is the way the US is

going. Can anyone really say that

wireless will never reach the sort

of capacity you are talking about?

How can you be so sure? Because

every single technology experts,

whether in America or Australia,

and the chief technology officer

for Telstra has just about had

enough. He gave a speech a couple

of weeks ago and asked if we could

just stop claiming wireless can

match fibre. It cannot. Every

technology expert in the world will

put their hand on heart and save fibre gives the best future-prove

developments and applications. long-term protection for future

Wireless is fabulous. We want it,

people want mobility. But they are

complimentary. On the NBN, it has

been a problem with the tender for

the company is rolling out, doing

the actual fibre rollout. The NBN

worry companies will price-couch. had to suspend the tender. They

Has this been resolved? That is

absolutely right. NBN has a

business plan. It has a $36 billion

price in its business plan and it

is working hard to ensure that we deliver to the business plan.

Negotiations have been going on for

the last 5-6 weeks. We hope they

will be resolved soon. I am not

directly involved. It would be very

inappropriate for me to be directly

involved. But they are not going to

pay more for this work? That is

exactly why they suspended the

previous process, because they were

not getting process -- prices

inside the business plan. We will

see the NBN working to deliver

exactly the prices and delivers --

and costs within the business plan.

They should be congratulated for

working to deliver the prices they

set themselves. There have also

been questions this week over Mike Quigley and whether he was completely open with the government about his previous employment at

the French telco Alcatel, which as

we now know is involved into

corruption around the world, bribing officials in different countries, particularly Latin

America. Are you satisfied Mike

Quigley was honest and open with

you? I am absolutely satisfied.

Mike Quigley is the victim of a

smear campaign by the Opposition,

by some sections of the media, who

are trying to smear his good name.

He saw information from Alcatel and

they gave him information. He put

it out publicly and informed me. He

then provided new information

saying that the information was

incorrect. On Friday, when Mike got

that information, he put out a

statement and apologised, that he

had not been given completely

accurate information. I am

absolutely satisfied that Mike

Quigley has been completely upfront

with the information he has

received. Let me be very clear.

There is no suggestion Mike Quigley

was involved in any of these rogue

practices by individuals who are in

jail. It is absurd for Mike Quigley

to be held responsible for the behaviour of rogue employees, as it

is for John Hartigan, the CEO of

News Limited, to be held

responsible for the activities of

people at the Melbourne storm. I

also want to ask about another area

of your responsibility. The free

set-top digital boxes in the budget

for all pensioners. Given you

believe there is a need here to

help pensioners switch over to

digital TV, you have been talking a

lot about the benefits of the NBN

will deliver, health and other

service delivery. Will pensioners

be given free NBN or some form of

assistance to make the switch

their? Firstly, the government is

turning off the analogue signal. We

are closing down one system and

introducing another. We do not

apologise for wanting to help some

of the most vulnerable in our

community, disabled, war veterans,

pensioners, who may struggle with

the changeover of that technology.

We make no apology because the alternate criticism would be we

just abandon people as we move from

one system to another. With the NBN

people will have a choice. They

will be switched over. If a pension

of just wants to continue to make

phone calls using the same phone

they have at the same price, that

will be possible under the National

Broadband Network. You will just

plug into the modem. There is no

other work needed for a pensioner

just to keep making phone calls.

You will get a fantastic new array

of choices, a new system that will

allow you, if you want to, to

upgrade and move into the digital

world that Australians are starting

to enjoy. We need this upgrade.

There is a vast difference between closing down the analogue signal,

moving to new technology. If a

pensioner just wants to keep making

phone calls, they just unplugged

from the wall and plug into the box

and they can keep doing what they

did for the same price. Stephen

Conroy, thank you for your time.

Good to be with you on this

historic day. Historic day, indeed.

As we mentioned, the Opposition is unconvinced over whether this $36

billion NBN is worth the pricetag.

Malcolm Turnbull has been arguing a

similar service could be delivered

much cheaper by running cable down

the street within 1 km of each home

and then doing the final connection

with copper. Would this be a

similar service? Joe Hockey at the

press club today did seem to

acknowledge there would be a

difference. Today the government is

rolling out a Bentley to every

Australian. We believe that we can,

as a nation, only afford a

Commodore at the moment. From our

perspective it does a similar job.

Obviously the Commodore is going to

be a lot cheaper for the nation.

Does a Commodore do a similar job

to a Bentley? We will leave that

for you to convert -- contemplate.

After the break we will turn our

focus to Joe Hockey at the National

Press Club today. How did it stack up?

Before we get to our

discussion on Joe Hockey'

budget reply today, we're

going to check in on the

latest news led lines with

Nina. The National Broadband

Network has officially gone

live for the first time on

the Australian main land. The

Prime Minister switched on

the super fast broadband in

Armidale today saying the

service will revolutionise

communication in rural areas.

Today's launch was the first

of five test sites on the

mainland to be connected but

the Coalition has criticised

the scheme saying its policy

will deliver fast internet

much more cheaply. Joe Hockey

has been force the to fresh

claims their numbers don't

National Press Club the add up. The he's told the

Coalition put forward more

than $50 billion in savings

measures at the election and

stands by the cuts. An inquest in Perth has been

told that the captain of the

fishing boat that crashed into Christmas Island last

year has abandoned the vessel

a day earlier. At least 30

people died last year, the

inquest was told the boat was

ship shape but not given any safety instructions in the

case of an emergency. Smoke

alarms are being credited for

saving the laoiftion of 6

people early this morning. Firefighters arrived at the

faots CIA address at 3 a.m.

to find the residence well

alight. Both the house and

its contents have been badly

dadgeed. Barack Obama is

stepping up pressure to

revive the peace process.

He's met to discuss a path to

peace. Starting a week of

intensive dim loam cy at a

time when there's unrest

sweeping the Middle East particularly on the welet

bank and in Libya. The Queen

will make an historic visit

in Dublin today, an important

side on the path to Irish independence. The British

shot 14 spectators there in

1920. It is the first time a

British monarch has visited

the republic for 100 years. Ian Thorpe is making a

comeback, going to target the

100 and 200 m free stile

events which ends any hope of

him winning a third medal in

the 400 m. He says he's

delighted with his progress

ahead of next year's London

Olympics. Tomorrow's weather.

Showers in the west, also on

the Queensland coast and

mostly sunny elsewhere.

Thank you. Shadow treasurer

Joe Hockey delivered his reply at the National Press

Club today. First to one of

the key points that he was

making. The shadow treasurer

warned of a potential of a

slowendown in China or even

indeed a bust and what that

might mean for the budget

bottom pline here in

Australia. Moreover China

and Asia generally will slow

from the current breakneck

pace and central banks of

develop ed countries will

begin to withdraw the

extraordinary amounts of

stimulus that have been

pumped into the global economy. Experience also

tells us that prices rarely

adjust smoothly. Through to

the bursting of the south sea

bubble of 1720 to the many stock market crashes in the

1920s, the 1970s, the 1980s and the 2000s and of course

the latter day house price

crashes in the UK and the US.

When booms bust they tend to

do so spectacularly and the

bigger the boom, the bigger

the bust. When booms bust,

they do so spectacularly.

Hugh Mackay, is there a real

danger of a bust in China? I

think that the Chinese

economy is certainly ce

celerating now. It's going to

grow about 8% next year from

9 to 10 at the moment. But I

think bust would be

overselling it. I certainly

think that booms don't

necessarily turn to bust.

Bubbles certainly turn to bust but I don't think China

is a bubble by any means. I

think that the point to focus

on with China is it's going

to be 8% bigger at the end of

2012 and the GDP that they

produce will be more resource

intensive than it was the

year before. Even if the rate

of growth diminishes which I

think it will I still think

they will be consuming more

and more resources as a

proportion of that growth. I really think we need to

separate ourselves from the

cyclical points about China,

and really focus on the structural uplift story which

is going to be a huge

underpinning for Australian

prosper if I ore the next

decade. What does that mean,

the structural underpinnings

and how solid or shaky or

otherwise are they in China?

One of the most reliable

indicators for looking at resource intensity and

economic growth over the long

run is the rate of

urbanisation. China is about

half urbanised so half its

people still live in rural

locations and roughly 10 percentage points are going

to shift to an urban setting.

That move is a very, very

high, they need houses, need sewerage kicked to those

homes, they wafenlet to buy a

car, start having disposable

income. It's a hugely high

multiplier activity. It

creates growth just on that

shift. It you can provide

jobs for them all which dhpb

has done successfully up to

this moment, you have a very,

very virtualuous cycle moving

forward. China hasn't

finished that process. India

is coming in behind it.

That's what I mean,

urbanisation equals strong

resource intensive growth.

How well is the Chinese

communist Government doing in managing this structural

uplift or boom? There are inflationary pressures we

eno. Are they handling those

appropriately? I don't think they're doing absolutely

everything right. The

treasury Secretary point out

yes, I did that their

exchange rate could be doing

more of the works, market

based tools could be doing

more of the work. At the

moment they're using a

patchwork of administrative

measures, quota s, plus

moving interest rates,

tiening liquidity, moving the

interest rate a little bit.

Most people in my profession

would like to see the

exchange rates doing more of

that work. When you do rely

more on the administrative

rules you can have more of a

stop start economy. The key

is if you do get the stop

they can start if very

quickly with those administrative controls. I

think that is what we saw in

late 2008, early 2009. We

would presumably see it again

if things did slow too

rapidly. Yes, they don't

have a problem of getting a

budget passed like we see in

democracies. After the break

we're going to look more at

Joe Hockey's budget reply

speech. Our panel Catherine

Murphy from 'The Age' and

Christian Kerr from the

Australian . Stay with us.

Welcome back to the

program. Welcome to our panel

joining me here in Canberra.

Thanks both for joining us,

with Joe Hockey in a minute. National Broadband Network

first, the government made a

big song and dance about

pressing the button in

Armidale today. How significant this for the

Government to have a positive

story to tell? The NBN is

such an intangible. It's all

such a typical political buzz waterboard word. It only

means something to a select

group of people. I don't see

much political gain to be got

from it at the moment.

People like the idea of high

speed broadband. Particularly

in areas like Armidale they

can see the benefitting from

this The idea's popular.

It's one of those things we

keep hearing about. It's not

a bread and butter issue. It

isn't infrastructure that has

the appeal that roads and

bridges have. Do you agree

with that? I travelled

actually to Armidale fairly

recently to do an assignment

actually on the NBN and got

quite a good sense I suppose

of the feeling in Armidale.

Were people behind this

thing? Yeah, and I think

Tony Windsor thinks it's a straightforward electoral

winner where something like

the carbon tax is much more

difficult for Windsor in that

neck of the woods. The braubd equation is quite straightforward. You've got

the paths from the home, you

ceck the home, you get all

these services. Armidale is a

university town. Is there

areas where they don't have

so much infrastructure, I

wonder how it goes down in

capital cities where the

majority of voters live. I

understand the point

Christian is making, I think

that's valid, an inner city

view of the NBN perhaps is

that we've got reasonable

internet, what's all the fuss about? Reasonable but not

great. Reasonable but not

great, exactly. So I think in

broad political terms it's a

net positive it. Certainly in

Armidale it's a positive. We

should point out in Armidale

while they pressed a big button, there are only 7 connections at the moment

there, I think motor vehiclely schools, but this

is a test period, they'll

start to roll it it out. We

still don't know what

customers are going to be

charged. It won't be until

later this year that the

various ISPs will start

offering a product and let us

know the cost: The other

question I thought was left

hapging today is what will

the Coalition do. If the

election is to be two years

off, that's a big if, presumably more will be

rolled out in places like

twaom ba, different parts of

the country. How do they unscramble that egg. It's

very difficult. This Government cancelled the previous Government's

wireless project. That was an

easier proposition because

essentially only documents

had been exchanged. There was

an agreement to build the

wireless network. It was a

less complicated issue than

removing existing services. I

think some of the

Government's desire to roll

this out quick ly reflects

the fact that the more you

can roll out the harder it is

to undo. You get the benefit

on the ground. Always political sensitivity in some

of those roll out sites too

if you recall. The Minister

pointed out this decision on

Armidale, Tony Windsor's seat

was taken before the last e

lection when he became all

important. If you go through

where the roll out has been

happening, there's some good

marginals there. That's true

but I suppose the countervailing argument to

that is a location like

Brunswick in Melbourne, who

chose that site? That's actually really difficult

because of the high sensety,

it's a difficult side to roll

out effectively. It's Labor

Green territory, quite

seriously. There's a lot of

politics in these test

sites. It would be foolish

to say otherwise. The

Coalition will have to have a

clearer line come a election

time whenever that is on what

they're going to do with the

stuff that's laid joined

ground. It is a dilemma for

the coalition. No, they need

a substantive position. I

think Malcolm Turnbull has always positioned himself

fairly carefully in this

debate. You will remember

when Tony Abbott framed his responsibility with the

demlation of the NBN, Malcolm

Turnbull wasted very little

time in re-jigging his job

description and gently

countering that. Turnbull

obviously has been a fierce

critic of the NBN, the

capacity for stuff-ups, overspends. That's fairly

enough. Let's have a look at

Joe Hockey now. The speech

itself followed we've heard

from the Coalition over the last week about what's wrong

with the budget, what the

Coalition will do in terms of

a road map, not specifics.

When the questions began they

did become quite vigorous,

challenging the Coalition

over their alternative

costings. In particular the Opposition have always

pointed to the election cuts

that they promised more than

$50 billion worth of spending

cuts. Andrew from the west Australian went through problems with those spending

cuts, counting, the fact of

savings not going ahead with

the company tax cut, all

quite detailed. Joe Hockey denied the suggestion of

double counting and hit back

at Andrew, have a look.

Well, Andrew, when the other

mob give you questions you

should challenge them on the

status of it. I mean, can I

say to you, our numbers stack

up, our 52 billion dollars

stacks up from last year,

right, our numbers stack up.

You could have asked that question at any time over the

last 12 months if you thought

there was double counting.

There was no double counting.

Our numbers are accurate. We

stand by those numbers at a

point of time. Putting aside

the fact Labor would be

unlikely to come up with a

question as effective as

Andrew's was today, the

answer from Joe Hockey,

Catherine, what did you think

of his perform ance more broadly? I wasn't in the

room, I watched it on television, which I think

most Australians would have

consumed that speech that

way, there wasn't much to

criticise in the speech. It's

that low small target

strategy that the Opposition

is pursuing, general points,

that was fine. I think things

got a bit stickier in the Q

and A as you said. I don't

know why Mr Hockey felt the

need to be so aggressive in

his repost. I think that

question has been asked of

the Opposition pretty

consistently since this

blow-up. We can only wish

that Government people would

have the wit to write such

acute questions. They keep

referring us to their cuts

and costings that they put at

the election time. And there

are still questions about

those. Exactly. It it fits

in very well. You can see why

you'd say it's a government

line, this is an Opposition

that's short on specifics. At

the same time I think voters

have a different standard of

proof for Oppositions, on

this sort of thing it's a

good gotcha game for

journalists, for government,

unless unfortunate one of

those spectacularly policies

that falls apart as you

launched it We evidence

readerings that say why don't

you put scrutiny on the

Opposition, it's your job to

hit them on the detail, see

how everything stacks up.

Media does have a roll in

that regard. Should the

Opposition be putting forward a detailed alternative budget

at this point of the cycle?

Probably not. The truth is

they simply can't. Judge

there's a midpoint between

not producing a fully bound

beautiful budget and not

giving us an adequate Sention

of the Coalition's detailed

economic vision. Again

Malcolm Turnbull's been

pursuing the sovereign wealth

initiative. I'm not saying

that Joe Hockey is a policy

free zone, that would be

stupid. There is a midpoint

between small tart and no

detail. I think it's our job

to push these questions.

Treasury is the one that

raised issues with these

costings. I think we can rely

on treasury as a recently

benchmark to have a

discussion. I understand the

political framing of what the

Coalition is doing. I think

we have a responsibility to

ask those questions. I think

oppositions have a duty to

try and sail as wide as they can between those two

points. A quick one to

squeeze in before we go,

another report this morning

in the Sydney Morning Herald,

petrol will be left out of

the carbon tax. Apparently no

final decision on this

according to Bob Brown and

Julia Gillard. There has

been no decision on any

aspect of the process except

parameters that were laid

down and made public earlier

on. Wait and see the full

details and look at it for

yourself and judge then. So

wait for the details, they're

still roughly a month or six

weeks away. Any great

surprise though that petrol

would be left out? They'd be

crazy to put it in I think

it would be a huge story if

petrol were in. I think expectations have been treblding in the other

direction. Obviously there

are still fine points of

detail. There will be all

sorts of ins and outs and

trade-offs. You can't expect

it in seats held down by

Independents. Thank very

much for joining us. We're

going to check what's been

happening in business today.

John, what have the markets

been like today? Let's talk about the markets and also

some of the economic da that

we've seen. It looks like

this economy is going to come

back and bite people with

home loans. The latest

consumer sentiment out from the Westpac Melbourne

institute shows that consumer

confidence fell 1.3% in May.

There was a special question

in the survey conducted just

after the budget was handed

down which reveals that 36%

of respondents expect the

budget will worsen over their

finances. Despite that bad

news we've also learned that

wage growth hasn't been as

strong as many expect it.

Wages growth up 0.8% for the

quarter. Economists expecting

something more than 1%.

Despite what appears to be

bad news on the economic

front the Reserve Bank is

expected to look through this

data. They released their

minutes of their recent meeting and said that there

is a two speed economy here

in Australia and those

settings have to be based on

the whole economy, that means

interest rate rises before we

know it. If we look at the

markets they were up about a

fifth of a per cent today,

it's good to see the markets

up two days in a row. We've also got the Australian

dollars up a little, 106.3 US

cents. The strength of the

Aussie based on improved

sentiments in the markets and

we've seen some better prices

for metals as well. A

reasonably good day by the

sounds of it. Not too bad. We'll catch you tomorrow.

That's all we have time for

today's show. Stay with us

for the latest Sky News.