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(generated from captions) (GIGGLES) Well, perhaps I bought too much. Not for this project. Let's get cooking. Great job, Scaredy.

Thanks, Ruby. (VOICES ECHO) Great job, Scaredy. (VOICE ECHOES) Did you hear that? Did you hear that?

(VOICE ECHOES) I - I think I did. Arrgh! What is it, Scaredy? Arrgh! That is so strange. (BOTH WAIL)

(GASPS) Ooh, Ruby.

I just had the strangest dream. Me too, Scaredy. gingerbread before bedtime. We have got to stop eating Closed Captions by CSI

This Program Is Captioned Live.

Good morning. The US Government has

Laden released home videos of Osama bin

Laden seized at the compound where

was killed in Pakistan. They're the Laden seized at the compound where he

first images of Bin Laden since

al-Qaeda released a video of him

prov official says the material seized 2007. A senior US intelligence

proves Bin Laden was actively

al-Qaeda from the compound in proves Bin Laden was actively leading

Abbottabad. A passenger aircraft has

crashed into the sea off eastern

Indonesia killing everyone

A Indonesia killing everyone on board.

Authorities believe around 25 people

were on the plane. The twin

turbo-prop plane took off from

City in West Papua province. At turbo-prop plane took off from Sorong

15 bodies have been recovered but City in West Papua province. At least

authorities believe more are trapped

underwater inside the wreckage. The

Government's deal with Malaysia on Federal Opposition has attacked the Federal Opposition has

asylum seekers as hypocritical and

ineffective. The Government has

announced an agreement with Malaysia

to to take 800 asylum seekers

Australia. In exchange Australia to to take 800 asylum seekers from

accept 4,000

accept 4,000 refugees from Malaysia. Australia. In exchange Australia will

But the Opposition has pointed out

that Malaysia has not signed the

United Nations refugee convention.

Tributes are flowing in for one of

Spain's most loved sporting figures

Seve Ballesteros, the golf legend


died after a long battle with cancer

at the age

has been observed at the Spain Open at the age of 54. A minute of silence

tun in by players and spectators. Stay

Cassidy. tuned now for Insiders with Barrie


Program is Captioned Live.

Good morning. Welcome to

Insiders. This Federal Budget

on Tuesday is the make or break

for the Gillard government.

The one last chance to rebuild

its credibility. Really? The budget after the last election,

not the last budget before the

next election. If the

minority government holds together there could be another two Budgets before the next

election. The hype even the expectation surrounding this one has the air of a budget

glirfed in the middle of an election campaign. Hello.

Good morning everybody, it is

good to be here. It is time to

turn your attention to the

budget. The Federal budget is important. This is my fourth important.

Budget. It is not likely to be

a popular Budget. Every year

this government has talked

about tough budgets and not one

of the budgets has been

genuinely tough. I'm not going

to speculate on budget figures.

You will see them on Budget night. Ha.

doing what we need to do now to The Budget message is about

keep our economy strong.

That's why it's important in

back to surplus in the budget that we bring it

is an important way of demonstrating that the nation

can live within its means.

Yep, big challenge on our

hands. I'm up for it. Get

out of the way. Give us a

chance. We'll deliver the surplus Budget. But of course

he hasn't said how. Ha. In this Budget we will be

continuing the priority I have

put on education. On the one

hand, they will not speculate

on other re forms in the

Budget. We will provide a new

$200 million allocation to

support schools and students

Gillard was anounsing yesterday with disabilities. Julia

welfare measures that are in the Budget. We will design a

system where teachers who are

performing well can additional pay. Another day, performing well can get

the another confused message from

the Government about the Budget.

In this Budget, we will

change our family payment

system so that the maximum rate

of assistance for a teenager, a

family with family with a teenager, will be

$4,200. It is the hunt for a

headline. Yes. That's why today I'm announcing that

Federal Government will require

teen parents to engage with Centrelink. Yesterday the

Government was spending money,

today they are trying to claw

it back. In Tuesday's Budget,

we will honour our promise to

increase the bonuss that

apprentices get for completing

by $1,700. Hang like groundhog day.

You've got to spend hours and

hours, days and weeks in

careful work, methodical

preparation so that when you

produce the Budget, it all adds

up. You've got a up. You've got a Treasurer

that is out of his depth. Wayne

as Deputy Prime Minister and as Swan is doing a first class job

Treasurer. I've always backed

myself in personal and political life. can't get this Budget right, political life. Ha. If you

you do not deserve to be in

power. It is as simple as

that. What we're doing in our

Budget is what is right for the

country. That is what is dominating our thinking, not

the politics of it.

Our program guest here in the

studio is the Shadow Treasurer,

Joe Hockey. First we will see

what the Sunday papers. Niki

Savva, the big announcement,

the Malaysia swap, the than the Budget I think is this solution.

deal with Malaysia whereby Australia will Australia will re reate 800

asylum seekers to Malaysia in

return for-4,000 refugees at a

cost of around $300 million.

While that's a temporary

breakthrough I think for the

Prime Minister in what has been

an incredibly difficult problem

for her, I think the price tag on her pride today is million. What do you think of

the initiative? It looks

patched up like everything they

have done on this have done on this topic since

the oceanic Viking sailed into

through. The thing Australia

hasn't been able to get right

since 2001 is we're the country

everyone wants to come to. In

the region there are a lot of

ports boats are setting off

from. Most of our neighbours

are not interested in stopping

the boats. This may be

start of a much more start of a much more pragmatic

policy which says "We will

empty the camps, if you stop

the boats". I can see it as a pragmatic solution but the politics from the government

has been appall ing since the

'Oceanic Viking". The whole idea

idea is to diskurj people from

making the trip, if this means 800

whatever period of time, know

they will end up in a back of a

queue in Malaysia, would that

make a difference? You would

think it would. This is Asia-Pacific solution. The

Pacific Solution did reduce the

number of boats. The thing

that's interesting about this

is we're saying in return, we

will take more people who have

already been judged to be

refugees. Apparently most of them are going to be from them are going to be from Burma. 4,000 people over four

years, about 1,000 people a

year. year. That's a fairly modest

number in the scheme of things.

The Opposition has said they

would take an extra 1500 if the

boats were stopped. A lot of

people seem to believe we can

take a lot more than that without public reaction provided they come in through

an orderly way, not the boats.

I suspect the line that will

resonate first thing tomorrow

will be one for five, what sort

of deal is that? Exactly. I

don't think

will go down well. It doesn't sound like a good deal for

Australia. The next question

is what happens after we reach

800? All people have to do

presumably in Indonesia or

elsewhere is wait until the 800

is reached, off they set again.

Do we have another deal for

another 4,000 for another 800?

One for five is not that

simple. The 800 going back

need to be processed. The

4,000 coming over are already

processed and declared

refugees. Barrie, since about

1995, the humanitarian intake

has been frozen at 13,500 give

or take a hundred each year.

Our immigration intake has

doubled, the proportion of

refugees has halved in actual

terms. Brian makes this point,

we could double the number and

no-one would care if they came via

via an orderly process. I

suspect the government may have

hit on a long-term solution without realising it.

It needs everyone in the region

engaged with us in the process

of stopping boats. We won't

stop boats if we continue stop boats if we continue to pretend

western Sydney should dictate

policy s. There are hundreds

of regions that deal with that.

Governments can get tipped out

on these things but the

Coalition government still has

the same problem. I would like

the debate to elevate, it does involve a solution with Malaysia, Indonesia, every

country in the region so we are

on the same team. On the

Budget, we have had Budget, we have had selected

announcements going on. The

latest one, free set-top boxes

for all pensioners. Not all of

them, that's a good thing.

Only for those on the base rate

of pension, otherwise it would be expensive and unfair. Which

pensioner do you want to be

denied this? Anyone who earns

more than a minimum wage. Why should someone on a part pension getting $40,000 get

this when someone on $30,000 doesn't. It is a public

policy purpose. It is trying

to ease the way across from

analogue television to digital.

The main cost will be, I think

it is essential to put it in

there, is the Government will pay to have the thing installed

otherwise you might have

set-top boxes sitting around.

And they get a lesson? Which is not easy to do. That's a

good aspect of it.

Nonetheless, it looks slightly

odd seeing you are trying to bring the Budget back into

surplus. It is another 300.

600 for the day. I wonder

whether the thing has been set

at 300 and asking the Senate,

if you want to block the

Budget, maybe we can throw in a

few more set-top boxes to let

it through. Now to Joe Hockey.

To take us there, here is To take us there, here is the Treasurer Wayne Swan a short

time ago on with more to say on the asylum seeker initiative. Sending

back refugees who jump on a

boat anywhere in the region and

putting them at the end of a

long queue in Malaysia sends a

tough message to the people

smugglers and all those

involved in them. This is a

one-off as I understand it.

800 people is a dozen boats.

Then it is open slater. That

is not the end of the

arrangement. This is a first

step, an important step.

region and contemplating

getting on a boat now knows if

they arrive here, they can be

sent back, if they arrive on Christmas

Christmas Island, they can go

back to the end of a very, very

long queue in Malaysia. There

is no certainty anymore. No certainty anymore they will be here

here and processed. Joe Hockey,

good morning, welcome. Good

morning. Happy mother's day.

Or to my mum. What do you make

of the initiative on virtually a swap with Malaysia?

Well, I must say, when I first

heard about it, I thought kids

in the schoolyard would do a better trading deal than this but this is trading human

beings. It seems like it is a

panicked reaction to a failed

border protection policy. Quite frankly, it illustrates

the fact this Government has no

sense of having a consistent policy on border protection. But this is the

first time, though, that any government has introduced

something that might be an

effective deterrent in

they make the trip, they will

end up at the back of a queue

in Malaysia? Hang on, we set

up the Pacific Solution. But

it also had temporary protection visas as well

backing it up. This is a temporary solution. On the one hand Wayne Swan says this

is the first step with Malaysia. On the other hand,

the High Commissioner for

Malaysia has said this is a

one-off. This illustrates the

panic of the Government, the

fact that under them, border protection policies failed. There are more than

11,000 people na have come on

boats since this Government was

elected, Barrie, and they elected, Barrie, and they are

spending close to a billion dollars on this. This year alone,

alone, three-quarters of a

billion dollars trying to manage centres, for example,

like Villawood, that are on fire. It is bizarre politics,

bad policy. I think it illustrates what a failed

government it is. You said you

did something like this in Nauru, the difference is almost

all of those people ended all of those people ended up

here. Less than 57% ended up in Australia out of Nauru. The number with this plan is number with this plan is zero.

No, it isn't. It is 4,000

refugees coming here. 4,000

refugees are going to come through Australia. They are

people who have stood in the

queue and done everything

right. In Malaysia. Yes.

Why shouldn't they be given

entry to Australia? Because it

is a trade-off. We are

sending them 800 people on boats, which is about 12 boats, it is a temporary solution. You

are saying people should do the

right thing and stand in the

queue. The 4,000 they will take have done take have done that. Why shouldn't they be shouldn't they be rewarded?

From our perspective, it means

the Malaysians are having an influence on our refugee

program, rather than the Government. Can we use the

4,000 in Our strong view is you

have to manage our own borders,

that means the policy of your

own borders. That means Malaysia doesn't going to send 4,000 people

here. It means our Government says we are going to take

people from these parts of the world world under these sishs circumstances. We are not going to have going to have anything defined

from the Malaysian government.

We need to retain control.

With Nauru we retained control.

Under this circumstance, it Under this circumstance, it is

a buy lateral deal with another

country and even today they

appear to be at odds with the

policy. What are the main aims

in the Budget? It has back to surplus, Labor won't

deliver it. 2012/13 It will

never deliver a surplus. You still doubt they will get

there? On Budget night when

they claim to deliver a surplus

in 2012/13 there will be a

gaping hole and the hole will

be the carbon tax. The revenue

figures in 2012/13 will be

wrong because there is no

carbon tax. The expenditure

figures will be wrong. The inflation figure will be wrong,

the growth figures will be

wrong. It is true the carbon

tax figures won't be there but

isn't it accepted the figures

will be here. . It will have

revenue at no more than 23.5%

of GDP. Secondly, it is not

going to spend more than 2% in real

real terms in growth. Thirdly

they said they were going to

have a Budget surplus over the

fiscal cycle. I say to you, there I would ex pet all the

rules would be broken.

Obviously, when it comes to revenue and expenditure, the

numbers will be wrong on budget

night because it does not include the carbon tax. To

make this point, on Budget

night, in 2012/13, the mining

tax will be in the Budget, the

carbon tax will not and they

both start on exactly the same

day. You are saying you could

get the Budget back into

surplus before then? I said we

would try, yes. Could you? don't know what the numbers

are. We will see on Tuesday

night. We outlined before the

last election over $50 billion

of savings including

the Commonwealth public service

by 12,000. They were hard

measures, Barrie, but we are

determined to do it. If you

want to take pressure off

families, if you want to take

upward pressure off interest

rates, you have to get back to surplus ... The $50 billion was discredited. itself used some of the measures they discredited. What

about cost of living about cost of living pressures?

The best thing is take upward

pressure off interest rates at

this moment. The starting

point has to be to stop

spending so much money. This

week we spent the government so

much money. Julia Gillard got

off the plane and decided to

smoke her credit card people.

Even today they are handing out

set-top boxes to pensioners.

The secret to getting into surplus money. Would you be handing

out the boxes? Can I tell you, there will be instances where

you have initiative here and

there. The bottom line is this

government said it was going to have

have a tough Budget. It is

not having a tough Budget

because all it's done in the

last five days is announce expenditure items. It

illustrates that Wayne Swan has

lost control of his own Budget. It couldn't be better

illustrated than the fact this

morning on TV Wayne Swan said

he would not confirm cuts the Defence Budget. Stephen

Smith wept on radio and

confirmed $300 million of cuts.

To the civilian arm.

fact is the Defence Minister is

announcing cuts s and the Treasurer won't confirm them.

It is a confused message. What it illustrates is the

Government has no direction and

can't be trusted. I want to explore explore the cost of living

thing. The 'Herald Sun' this week, published some research

they commissioned from the

shows the average household is

$23 a day better off than five

years ago. Do you accept

that? No. I think cost of

living is the biggest issue for

Australians. They have

the work and the research.

That has to beat political

rhetoric. It is not rhetoric.

If you speak to every day Australians, their housing

costs are up, the cost of fruit

and vegies are up. That's an

ek dotal evidence. It reflected in the CPI numbers. What comes through in the CPI

numbers which is fact is that

the things people want, like

televisions and computers, are

cheaper but the cheaper but the things people

need are more expensive. Like fruit, vegetables and

petrol. What politicians are constantly telling people who

have never had it so before,

you ignore that wages have gone

up, taxes are down and welfare

benefits in a lot of cases are

up. I don't accept tax is

down. This is the first time in

ate years there will be - tax cut for Australians. Retro

speckively over the last five years they have come down.

Because we put in place a system of tax cuts system of tax cuts that benefits everyday Australians.

We did it because we could run

Budget surplus s. That's why

cost of living has gone the

other way. From my perspective

speaking to every day Australians, everyone tells

them life is good, the

government tells them, yet they are facing higher everyday life. It is the

paradox of modern politics that

the economists say things are

great in the best terms of

trade ever, but for everyday

Australians life is harder. It

shows the government is out of touch because they don't

understand it. They believe

the economists. We are listening to the

listening to the people. Let's

have a look at some of the

initiatives announced. Set-top boxes, you didn't support it?

I want to see the context of

it. I don't know if there is

a warehouse full of these for people. I don't know. What I do know is that in the

days before the Budget, they

are announcing another $300

million. The teenage mum, million. The teenage mum, the initiative to get them back

into school or the work force.

It is good to get people into

the work force provided there is

is a right support network.

There is no use putting

pressure on teenage mums, in a

pilot program, if they can't

get childcare. They are saying

they will provide the childcare.

are referring to is under an

existing scheme.╝White╝That's a

maybe. We will look at

it. What about this payment of

$10,000 for families with teenage kids to get them

through to year #12k 12 I am

curious as to why the government is handing out so

much money at this point of

time. It is an extraordinary way to ease the pressure on

families. I am not convinced giving

giving money to parents is

going to prevent a child going

off and becoming a plumber electrician and leaving school

early. That's a maybe 6 We

don't know the details. Every

time we are asked about these

issues, we find out into the detail it is a different initiative. Every

time you are asked about these,

you never get a yes. You will

see it in Parliament. What

about the fringe benefit things

for people who are lucky enough

to have a car in their

employment. I don't accept

lucky enough. For a tradie,

sparkie, people on building sites, for a lot of

Australians, their car is their

business. I suspect this is

going to make their motor

vehicles a lot more expensive. We want to see the We want to see the details on that. If you live outside of

Melbourne in Geelong and you

drive to Melbourne for work,

your car is your business and your livelihood. This idea of

making it more expensive

through higher taxes seems a

bit rubbish. On the banks and

the review, the concluded this week and a

recommended review of the

banking system, they want to

see a break-up of the dominance

of the four banks. Do you

support that? I have warned

exit fees will affect non-bank

players. That's been reflected

in the Senate inquiry outcomes.

Wayne Swan needs to listen to

the Senators that have done the

hard work he never did and look

at how smaller players are not

going to be disadvantaged by

the cum ber some policy of the exit fees. Last year they

raised the home loan rates by

more than the Reserve Bank cash

rate, there was hell to pay.

The inquiry has found they

acted in response to higher

costs. That's embarrassing for

politicians. I don't accept

the banks didn't have capacity to

to cut slack to their

customers. When some went

higher, it reflect s some were listening and others weren't. Thanks for

your time. Thanks. Are you

aware of a fire in a demountable building one month

ago? In which pub There was a

bomb in a detention centre in Villawood. No. The Minister not

know. They found a homemade

bomb. It was a relatively

small fire in Villawood. It was an attempt to kill people.

Ray, I'd need to check. I'm

not aware of the concept you incident you are referring to.

I can think of few more

serious incidents than for there to be a bomb in a detention centre.

After the fire was put out,

they found an aerosol can of fly spray and attached

fly spray and attached to that

was baby oil or cooking oil in

it. They haven't seen told

him there was a bomb in the

detention detention centre. Can you tell

me, given the fact you don't

know about it until I have told you now, whether anyone has

been arrested over the attempt to kill Australians?

A can of aerosol and bit of

oil ... People choose to call

it a bomb, others a The Minister is responsible

for public confidence in the

immigration program and yet he

wasn't aware there was a bomb in a detention centre.

I should have been informed

about it. In this portfolio I have seen some extraordinary

things under this Government

but I think this one takes the

cake. What happened here

apparently is some terrorists

tried to kill Australians.

picked up on it. It wasn't a

bomb in a normal sense of a

word. If that's the case, why

are issues like this, picked up

and exaggerated. It seems to

come under this topic. I don't

know about this. A bomb require as debt tat - require as debt tat - detonator

and explosive s and metal which

turns into shrapnel. We had a

baby oil and a singlet or towel

soaked in canola oil. The door

and window on this room was shut so there wasn't enough

oxygen to set it off. Are you

expecting us to believe if you

put common household goods and

leaf them on the table and

leave the door open, it will self-detonate. I am not

suggesting it is not a serious

matter. Aerosol cans do explode, especially if you attach accelerant to them. We

were told they were designed to

kill people. Journalist beats up story, up story, what a surprise. The

fact is the Minister wasn't

told about it. Why don't the

facts matter? Because this

Government has been bullied in

this debate by its own

conscience, by media and by

Opposition. It doesn't know

what it stands for. You look

at Ray Hadley, he can say

whatever he wants, Chris Bowen

sits there and goes

was that?". Ray thinks he is a genius,

genius, but he hasn't got the

facts right. The government isn't in control of the situation. There are riots on

Christmas Island, Villawood.

It is a miracle no-one has been

hurt or killed so far in what's

happened. The fact is the

government can't control the

situation. The fact also is

Ray Hadley seems to be privy to

a lot more information than

Chris Bowen is. That leaves

Bowen in an even more to think that Bowen is one of

the more talent ed people in the government and I think what

is happening to him is a shame. I

I don't think Gillard did

favours to him by putting him

in the job. Counting down the

days until he gets another

portfolio. Let's go back to

the original issue. We will

hear from both Tony Abbott and Julia Gillard. This

announcement of what is in effect a people-go-round might

be a good deal

it is a lousy deal for Australia. This idea that

they will take one and we will

take five just risks Malaysia

becoming the open back door to

Australia. Do you think you

would? Do you think you would,

sitting in Indonesia, you have

got one shot, so much money,

you have only got one shot, so

much money, one life to lose,

and you do all your money, your

one shot, do all your money,

your one shot, potentially lose

your life and go to the back of

the queue. I will allow you

to calculate the odds. If you

want to make the journey, you

are rolling the dice because

you will probably end up back

in the queue. In the back of the

the queue or you might drown.

It is harsh stuff. The point

I made earlier is a lot of

these ports are letting people

make the trip in the first

place. There isn't a vested interest

interest at the region to stop the boats from

coming here. This may be the

first crack of light in this

debate where the Government may

have worked out a way to

negotiate with adult nations in the region to help us

flow in exchange for us

bringing people who have already been found to be

genuine refugees. What the

Government will be hoping for

is a bit of criticism from the

Left. Bob Brown has

contributed to that. Looking

at Manus Island as the alternative to East Timor which

is clearly dead as an idea, Bob Brown called it a return to the

Pacific Solution. Here he

is It is part of the Labor

Party drifting across to the Tony Abbott or John Howard

solution. Already the Abbott

Opposition has been claiming

this is their idea effectively

being taken up again by the Gillard Government. If Manus

Island went ahead, why that

would be any more a return to the Pacific Solution than say

if East Timor had come off? Because the Coalition used

Manus Island for one boat load

of Iraqis that ended up

throwing their children in the

water, but didn't. Manus

Island was in the original Pacific Solution that Labor didn't want to look at it in the first place. They would

have been smarter to do

have been smarter to do the

scoping before they made the announcement on East announcement on East Timor

because the people of East

Timor weren't ready for them.

It has taken them a year to

acknowledge that doesn't work.

Manus Island was sitting there,

could have been reactivated and it would have been an argument

between Gillard and Abbott at the last election about UN

signatory, not that Nauru is a

better staging post than Manus. I don't think Manus is

necessarily a good staging post either. Is there a point that

Manus Island is a signatory to

the UN convention. Nor is

North Malaysia. What does it

matter. The other interesting thing is while Kevin Rudd was

able to negotiate a no-fly zone over Libya

Timor to agree to a few boats

landing in Dili. I don't

think there was all that much

effort put into getting East

Timor going. Julia Gillard

announced it in the election

when already Foreign Affairs

was advising it wouldn't be a

goer. When Chris Bowen said

that he expected there would be

demonstrations or protests over this,

this, I think he there will be". That's over

Malaysia. The Manus Island

thing separately, is there a

place for that in the whole

suite of responses to this?

There has to be. This deal

with Malaysia is only as they said

said yesterday, one step in the

process and Manus Island is

still a live option. They

still have to proceed with an offshore processing centre so

the most likely place at the

moment is Manus Island. can't let it drop off. On the

800 they talk about, they were

careful yesterday not to say

they will be the first 800 they will be the first 800 that

arrive. It won't be a question

of saying that's 800, of saying that's 800, the deal

is off. I presume they will

say 200 this month, maybe 200

another month so those who are

contemplating making the

journey will never journey will never know if they

are part of the 800. It is a

de facto temporary protection

visa. In the mind of every

refugee, asylum seeker that

comes by boat, they may not here forever. They may stay in

a detention centre for a year

or two but they may get sent to

Malaysia which puts them at the

back of the queue. back of the queue. It operates the same as the

temporary protection visa, it

made the refugees think there

is no point coming to Australia

because we weren't a welcome

host. There is a 20 million refugee problem around the

world and we are arguing about

4,000 here or 800 there. I

still think we have had a brain

snap. Part of over from Kevin Rudd losing his

nerve over the 'Oceanic

Viking'. As soon as people start focusing on bigger

issues, it could lead to bigger

issues. It won't lead to

another 'Oceanic Viking' because

because they will be flown

home. Much bigger so-called illegal entry problem with

people coming by plane than by

boat. If you compare

the first quarter of last year,

numbers are down. If that

trend was to continue, the

Government can claim it was

partly due to this initiative. If numbers are down, there

might be a different feel about

this? They won't make the

claim "We stopped the boat",

they hope the conversation goes

away. The thing is we did a

poll on this a few years back

at 'The Australian', a couple

of years after Tampa we asked the question about whether people Howard did in the Tampa

incident. The majority of

electorate didn't like it but

there had been in boats. - no

boats. Let's talk about the

Budget. We will listen to Wayne Swan.

Swan. I want you to channel

Paul Keating. He used to give

us pithy descriptions. One was

this is a Budget that will

bring home the bay con. Budget will get us back in the

black, . Sound familiar? When

you think back to 1998

Peter Costello was Treasurerer,

that was the headline, back in

the black. I can't believe

Costello was ever in the red.

It was never his fault we were

in the red. It was John

Howard's fault. 2001 they

went into deficit to save the government. There are a lot

of reasons for that, George, including the Reserve Bank putting they said they would look

through the GST inflation effect and they didn't and they still

still put up rates. The economy was going back wards.

What's the test? How will Government be judged on this

Budget? In some ways talking

about a tough Budget is silly.

The key to the Budget is

whether they have good

decisions which help improve

the economy but cuts away

welfare spending to people who

could pay for themselves and could pay for themselves and

then you can still deliver the

are using the Budget to do

something worthwhile for the

economy, particularly in

education and skills area which Julia Gillard keeps talking

about. But funding for

universities is projected to

fall well below, as a share of

GDP, the average of other

advance ed country. Money per

spending per student has fallen

by a third since 1994. I read

a speech Julia Gillard gave in

March 2009 as education

Minister where she was slamming the increase that occurred in

the student/staff ratio. That

will go up because they have a

plan to increase tremendously

the number of graduates from Australian universities but they are they are not putting funding in

place. You say they have to take away welfare where it is

not needed. They will halving

the discount if you pay up

front. That is not welfare.

The big ones are Budget subsidies for retirement incomes through superannuation

and the aged pension which

within a couple of years will

be over $80 billion a year. A

lot of money goes to people who

could easily afford to look after themselves. There is no

sense this is coming up in the

Budget. We are talking about

electoral suicide. The

government has been practising

every form in the last couple

of years. Knocking off

people's supers ... You can

means test these things. If you you don't properly means test

these things you will never

find the money you need find the money you need to spend to help the economy and

bring you back into surplus.

Never have money for sovereign

wealth funds if you don't

control the growth in welfare

spending to well-off people.

Family allowance s, the same

applies there. I suspect you missed the theme of the Budget,

Brian. It is welfare to work.

It is not removing welfare

... Job security. lot about that. They are

predicting 4.5% unemployment,

500,000 new jobs. That's a key

them. It will be. It will be interesting to see the interesting to see the way the media receive this Budget

because, overseas, if there is

a surplus and it is one you can

bank in 2012/13, the rest of the world is going to go

'Australia, miracle economy'.

Only rich nation to survive the

GFC, first nation back into the

surplus. None of this translates locally because the

Government hasn't been able to own their success through own their success through their

GFC. They sacked their Prime

Minister a couple of weeks out

from a election because he lost

the plot. A Treasurer who has

had difficulty communicating.

20 years from now historians

will be looking at Wayne Swans

in a transactional sense as one

of the best Treasurers. No-one

knows because he can't sell it.

I don't know about that.

Because they have invested so much in much in the surplus, it can't

be a surplus. It has to be a

credible figure. We can't

slide across from the red into

the black. It has to be a decent crossover. Joe Hockey

has $50 billion in cuts. Joe

Hockey is also saying when you

bring in the carbon tax, it

according to him will have more

revenue than will be paid out

in compensation, yet that hurts

bringing the Budget into

surplus. Welfare to work,

there is no money to be saved

in the short-term for the

you require a lot of spending.

People who are long-term

unemploy ed, to get them into a

job, you have to get them job

ready, and pay employer ready, and pay employer subsidy

s. The same with people

disabled. Employers won't take

people on they think can't do

the job unless they get

assistance. You mentioned the

carbon tax. We saw this week

an example of the degree of

difficulty for people trying to

get messages out there. is the headline in 'The

Australian' which says 'West

Westpac joins the revolt'.

That headline is wrong. Quite

annoying to see a headline like

this. We have been an advocate

of an ETS, a trading scheme for

some period of time because we

think it is the best way in

which you can drive-in novation

and drive the necessary changes

that are required here. A

carbon price is one step in that direction. The point here

is are we being misled about

the level of hostility towards

the carbon tax in terms of business business community attitude to

this. Sometimes you get a

headline if you oppose it, but if

if you support it, you don't.

The point there was the headline, it was

headline, it was the headline she was objecting to, whereas

the body of the story was in

line with what she had been

saying. There was nothing in the story to support the headline. Well,

saying that she supported an

ETS as opposed to a carbon

price and the uncertainty was

hurting business. That was the whole point. She was not

supporting what the

was saying. She wasn't revolting but she wasn't

supporting what the Government was

was doing which is basically

where everyone is at. She

supports a transition to the

ETS via a carbon tax. The one

thing she is saying that is not

credible is the ETS would give

business greater certainty. doesn't because the price of

the pollution permit jumps all

over the place whereas the tax

gives a same place. gives a same place. The

'Financial review' are saying the people were hand picked to

turn up at kir Billy House to

talk about it. They have been

saying it has been ambushed

saying it has been ambushed by

the people exposed to the tax

and the generators. Is it true

there are divided opinions

within the business community?

It is true to the extent that

the no case gets a better But the yes case hasn't been

given a good run by the

business community itself. Business has been conflicted

ever since they watched the miners almost knock government, may have got rid of a Prime Minister in the

process. They like to reserve

the right for that issue. They

didn't do it for the Coalition.

They were the first ones to run

away from the GST when the

going got tough on the GST.

Any government, Coalition or

Labor, that relies on business to promote a wasting its time. That's

exactly right. It is not as

if ta they are queueing p,

even the so-called supporters

of what the Government is

doing, to get out in the media

and say 'This is a great idea,

we are behind it'. Everyone is

holding back. They are not

about to spend $20 million on advertising saying they support

it. The business sector will make money out of the trading

system, if it is a trading system. They are strongly in favour of accurate read on what the

public thinks because the latest Newspoll suggested 60%

are opposed to a carbon tax,

30% in favour? The question was "Do

tax?". What if the question

was "Do you support taxing the

1,000 companies in this country

who pollute the atmosphere the

most, yes or no". I will answer this question by

analogy. Every question asked

on the Iraq war was do you support involvement John Howard still won the election. Same with the GST.

The public reward on results. My point is it is immediate the wider media right

writes into the future that 60%

oppose the carbon tax. It is

probably not kralt accurate.

What if you throw in

compensation. You will get

more compensation, it is not a

good idea, it

you are pensioners, you will

get double compensation. If

you are a trade export company

you will get 95% of the cost.

Where is the pressure to reduce

emissions if you are getting

95%? The generators were going

to get staggering amounts of

money. When you put an excise on smoking to reduce it, you

don't say the tobacco companies

will be compensated and all smokers will

smokers will be. It is perverse policy to compensate

the generators in particular.

This is the problem. If

people think they are going to

be fully xen saited be fully xen saited for a measure that is being introduced think they

the point of it? Why are you

going to tax me and reimburse

me. They are not taxing. They

are taxing polluters who will

pass on costs. That is the

other problem with the poll

questions you were asking

before, the questions are complete. It is never as

simple as "Do you support

carbon tax or pollutioners should be compensated?". We

move on to the easier one, the

pokeys. The report came down

during the week, the new

element in there was that for

small country clubs or pubs who

have 15 poker machines

they will get seven years to

get their act together. I have a good relationship with the Government on this. There is

not the slightest whiff of a

problem in that relationship.

I am more confident than ever these reforms are going to go

ahead. I simply say to those

in the poker machine industry,

not all of you have been

cooperative with me over the

past eight months. It is way

beyond time to work with the committee, to work with me, to

work with the government

because the reforms are going

to happen. He is saying a

couple of things. Too much

media interest focused on this

issue of whether I will bring

down the government or I won't.

Which he happened to

propagate. The second thing to

the industry was 'Work with

me'. A lot of was pitched to the Independents like Oakeshott

and Windsor who were worried

about the impact of some of the measures on the smaller clubs.

I spoke to Windsor yesterday

and he said exemptions until

2018 but what happens after

that? What are the guarantees

for the smaller clubs after

that? He is worried about

that. But more fully he is concerned - fundamentally he is

concerned these measures aren't

going to do anything to stem

problem gambling. They won't

work? Un less he will be

convinced they

will be hard to get Windsor on

board. The other problem board. The other problem for

the Government too is that they

have to get the States on side.

So far NSW and So far NSW and Victoria are

adamant they won't go for

mandatory precommitment, they want voluntary. There are

problems on every front. Like

every other issue, this one is

not clear cut. Can you see a

way through on this? I can see

a way through. If you are

going to offer someone a

seven-year exemption, you might as well give them an exemption

for life. If the argument is

they are not going to cope with

the impost, they are never

going to cope. If it is the

big clubs and casinos he wants

to get it, go for it. Forget

the small fry. Precommitment strikes me as a little too much government intervention here.

Also, absolving the individual

from their problem. Voluntary precommitment is not a bad idea. Most problem gamblers

know they have a problem. I if they have to tell if they have to tell the

operator 'I only have a couple

of grand to play with'. They

do that when you are drinking.

In the time left, I want to raise the Osama Bin Laden death

but in this context where it mi might have an impact in Australia and that is our

commitment to the war in Afghanistan. Julia Gillard said this. Of

had hurt quaids al-Qaeda, its

leader being executed has hurt

al-Qaeda but it has not killed

them. This means we have to

stay the course in Afghanistan.

We are there to prevent Afghanistan once again becoming

a safe haven for terrorists.

We have to see the mission

through. She puts it in the

terms "We wait until we know it

won't be a safe haven terrorists". There are plenty

of places where there is a

handful of terrorists. There

is a handful of al-Qaeda. The

Taliban are not the al-Qaeda. Julia Gillard, from

the beginning, she has not

backed President Obama, she backed President Obama, she has

backed Petraus. Obama wants

to get out of Afghanistan as

soon as possible, because it is

expensive and it is an

unwinnable war. He has said I

won't do 10 years

another trillion dollars.

Petraus wants to stay forever. Gillard said we will

least 10 years and I will decide when our troops

withdraw, not the Afghan

government. What's happened

is Obama has kicked Petraus

side ways to head up the CIA so

he is in a better position to

make it easier to put the soft

general in there and pull the troops faster. troops faster. Before we leave

this topic, Jon Stewart, not

somebody traditionally un apoll jetcally a pat

is the - patriot. I am too

close to be rational about

this, last night was a good

night. For me. Not just for

New York or DC or America but

for human people. Can they

still do damage? I'm sure.

But we're back baby. The point

there, what he is saying "We're

back, baby". Doesn't that

expose the extent to which the

Americans have been hurt by this and they now feel this

single act has given them their

power back. They have had a

couple of crises, dating back

to Sputnik and the rise of

Japan and the evil empire.

Each time they knock one off,

they have to knock off one

person to feel good about

ordinary 10 years, they have

had two recessions, two big

bubbles and almost crashed the

world economy twice. Now here

is Mike Bowers and Talking


I'm Mike Bowers. I'm

talking with the one and only Bill Leak with 'The

Australian'. Good to see you.

Good to see you. Twitter melted down. myself. As soon as I heard

about the news of Osama's

death, I found myself glued to

the computer screen and I

staded there for hours. Couldn't do Couldn't do anything about it. After 10 long years,

finally, Obama binned Laden.

(LAUGHTER) it did take a long

time. This one seemed to capture everyone's imagination.

It is a historic picture of a

real event. There is a

definite message here and it is done by the chief frafer Pete Souza - in the employ of the White

House. They are extraordinary

pictures. I also find it

interesting when you look interesting when you look at

Obama's face in these, and he

is looking genuinely is looking genuinely weighed

down by it. What a good job

he is doing of covering up that feeling that's inside saying "If we held an election

tomorrow, I I'd romp it in".

At the end of the meeting there would have been back

slaps and hands shakes smiles. I don't think anyone

is too upset about the fact he

has been murdered but the triumphalism is over the top. Mark Knight take on what he thinks went on.

With the commander in chief

with the son son console. He

is doing a good job too by the

looks of things. The little tongue out. A disturbing Spooner Deeply

disturbing. Beautiful drawing.

╝Yellow)As always. I ╝Yellow)As always. I found that disturbing with the blood Spain.

Katauskas sees it as a job

opportunity for other despot s in the region

Alan Moir has his own take on

why it was Pakistan didn't

realise he was there. I think

this is one of the most beautifully drawn cartoons I have seen for a long time.

Each of the people here that look like Osama Bin Laden, they

are done so effortlessly. I

was talking to a dear friend of mine about this this

over a cup of coffee, she said "I

"I know people will say that's

terribly racist, but isn't it funny?".

funny?". Meanwhile, Julia has

flown back home and prepared

for a show of her own. I bet

she is wishing she was back at

the royal wedding. Talk about a fire fight in Abbottabad.

She has come She has come straight into one.

Tim is difficult to draw

because every time you see a

photo of Tim, there is the roundish face with these huge

teeth and he is always smiling.

If you want to make him look a

little bit angry, as a

cartoonist you have a job ahead

of you. You have to do it in

the eyes. Someone was making

hay while they were away. This

one was a lovely drawing. Big

polluters, hands in the air

There is nothing else to say

but thank you very much for

coming on Talking Pictures.

I'll do the honours, back to

you, big, bad bustling Barrie.

Thank you. Final observation.

The stimulus runs out but the

March quarter may show negative

growth. I hate that term but

the economy may have gone back

wards. If the bt lets people with tax-free with tax-free pension of $300,000 or more get

prescription for $5.60 when a

mug on a minimum wage has to

pay ... Greg combay meets

tomorrow to try to nut out a

deal on the carbon tax. They

will need every bit of the $700

million on the table to get the

deal. That's the show. Now how the death of Osama Bin

Laden helped Barack Obama kill

two stones. I was watching 'Celebrity Apprentice'. I am

watching if the Seth Meyer had

a shellacking of Donald Trump

at the White House correspondents dinner had left

a mark. When it looked like

the sad lady was going to be

to ruin 'The view' ... We will

hear from the President of the

United States. He will

address the country. Boom. They break into 'Celebrity

Apprentice'. This is like

10:30 at night, out of nowhere. 'The President has an

announcement'. Not only did

they kill Bin Laden, but they killed Donald Trump's shot at being President. 'Celebrity good the ratings were? You

G'day there. Welcome to the

program. It's been all about

the banks this week. Three of

the big four have put out their

results, giving not only an

insight into the battle for

market share, but also the post-GFC economy, and specifically the fact that

loans are being paid off these

days, not made. With

competition between the banks

on full display, the Senate tabled the result of its

inquiry into bank competition -

another inquiry is recommended.

We'll look into the results and

talk to the ANZ's Mike Smith.

Fairfax decides to sack the

subs. Will that save the

company or destroy it, as the

journalists argue?