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Address to the National Press Club, Canberra [and] Questions and answers

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New years bring new reflections and new work to do.

So it is as we get down to business in 2013.

Today, I intend to do three things: • To take stock of our nation’s position; • To outline the action needed to shape our future; • To detail a plan for this year.

First, let’s take stock.

Action begins with the evidence. So let’s take a warts-and-all look at who we are today and the opportunities and risks which confront us.

We are a nation of 23 million people, whose median age is 37, an average which continues to rise.

Around four in five men and women will have children, and the average age of a mother when her first child is born is now 29 years.

We share the world’s twelfth-largest economy, up from the fifteenth-largest under this Government, and the median wealth of Australians is among the highest in the world, ahead of nations like Japan, Italy, Belgium and the UK by a considerable margin.

Our travel time to work keeps getting longer: we know that in our biggest cities, the time spent travelling every week has increased by as much as an hour and a half in the past decade - as many as 1 in 6 workers spend more than an hour every day getting to and from their job.

The price we pay for electricity and gas has increased by 120 per cent in the last decade and 26 per cent in the last two years.

Despite low inflation and low interest rates, we still feel these pressures on living standards.

Superannuation returns are only just beginning to recover from the hit delivered by the Global Financial Crisis. Capital city housing prices have not grown at all in the past twelve to eighteen months, compared to the average yearly gains of eight to ten per cent in the years before the GFC.

These two impacts have us worried that our dreams of financial security are harder to achieve than ever before.

Today, we save over 10 per cent of household income. In the years before the GFC, we used to save nothing as a nation.

It was a phase that could not last - but unsurprisingly, many Australians miss those days when they could spend all of their income, see wealth increase through ever-rising house prices, and through easy credit, borrow against the house again to spend more.

We have seen 9/11 and the Iraq war, we fight still in Afghanistan, we are living through climate change, through the aftermath of the biggest economic meltdown since the Great Depression and through an economic and strategic re-ordering from West to East as well as the upheaval of the Arab Spring.

While an Australian is four times less likely to be a victim of homicide than is an American, some communities are understandably concerned about crime and cohesion.

We get our information and connect with each other in new ways. Australians use 16.2 million mobile phones, 3.5 million iPads or tablets - a number expected to double this year - and we have 11.7 million Facebook accounts.

What does all this mean?

It means it can be a struggle to make ends meet and it can seem far harder to get ahead in the post-GFC world.

It means we are more likely than earlier generations to face the challenges of parenting and caring for older parents at the same time.

Combined with the travel time to work and, for some, concern about community safety, life can be very stressed and pressurised.

Through all this, we are more connected with information about world events and causes of community anxiety than ever before.

Over time, the uncertainties and pressures we live with have led some of us to be concerned that our children won’t live a better life than us.

I want this audience to feel all the force of that concern.

I most certainly do.

These are complicated facts, driving big changes - in family life and in society as a whole. My stock-taking tells me this:

Australia is a great country with a smart, hardworking people.

We face ever-changing, ever-new challenges and opportunities in a fast-changing world.

Our future is never assured, shaping it is up to us.

In the real world, “real solutions” means understanding the modern world, developing serious policies ... and offering detailed costings.

That is the only way to build a nation’s future.

We enter 2013 with more strength to shape our future than anyone else in the world.

While our world has risks, we live in peace and security at home, and we have a comprehensive strategy for our future national security, which I delivered last week.

While the strategic order of the world is changing, we have accrued new opportunities and new respect as we move on to the United Nations Security Council and prepare to host the premier economic forum of the world, the G20.

We are a democracy with our squabbles and contests but above all with an inherent strength that is served by quality institutions.

As we live through climate change, we’ve done, painfully but for good, the single biggest thing we need to in order to reduce carbon pollution - pricing carbon.

As our nation ages, we are modernising our health care, aged care and retirement incomes policies.

As the global economy still splutters, unlike the rest of the world, we have managed our economy so we have low inflation, low interest rates, low unemployment, solid growth, strong public finances and a triple-A rating with a stable outlook from all three of the major ratings agencies.

We live in the economically strengthening region of the world and we have a clear plan to make sure Australia taps in to this growth in Asia and enjoys the opportunities it brings.

As a generation of Australians, our greatest task, our highest calling, is to build a future of greater shared opportunity and less risk for the next generation.

I want to eradicate any sense we can’t get this done.

As a nation, we are strong, fair by instinct, smart.

I know that we have it within us to ensure the next generation of Australians is stronger, fairer, smarter.

I am an optimist; everything we have achieved as a nation reinforces that optimism, everything we are planning delivers on it.

This is the central work of government - leveraging our strengths, addressing risks, implementing our plans, shaping our future, delivering security and certainty.

Today, I will outline my approach to this work of governing, my approach to delivering jobs, opportunity and fairness and meeting the needs of families feeling the weight of modern pressures.

Both for the creation of jobs today and to shape a future of prosperity and shared opportunity, we have to manage our economy well.

We have done this well so far with more than 836,000 jobs created during the worst of economic times. More than 836,000 ways in which we have reaffirmed that for our Labor Government nothing matters more than the jobs of working people.

That belief will guide us and drive us as our nation now faces up to further challenges: specific challenges to our economic diversity and competitiveness - as well as a revenue challenge.

At the intersection of my concern about economic diversity and competitiveness is the strength of the dollar.

Our dollar has appreciated around sixty per cent in the last three years.

Economic orthodoxy prescribes that falling terms of trade and falling interest rates will result in a fall in the value of a currency.

But even though our terms of trade peaked around fifteen months ago and interest rates have been falling, our dollar is now actually higher.

Consequently, we have to have a plan which can withstand the possibility of a persistently strong dollar into the future - not simply rely on the economic assumption that our dollar will fall.

This is critical because over the coming year or two we expect to move beyond the peak of the investment phase of the mining boom.

Before any one is tempted to construe this as me saying the mining boom will end in eighteen months’ time, let me be clear that beyond this point mining investment will remain historically high for some time, while a sustained higher level of production will deliver enduring incomes and export returns for our nation for years.

But when the peak of the investment boom is behind us, associated as it is with peak demand for labour as huge ventures are built, we will see slowing jobs growth in the resources sector.

Ordinarily, economists would tell you this change, bringing with it a lessening of demand for capital, would be associated with a reduction in the Australian dollar that would assist export exposed industries like manufacturing, tourism and services that are exported, like education. This would enable these industries to grow jobs faster, offsetting slower jobs growth in resources.

However, just as the dollar's strength has persisted in this period of declining terms of trade and interest rates, we need to be prepared if it persists despite a lessening of demand for capital.

The economic diversity and competitiveness pressures our nation faces now, because of our strong dollar and the huge boom we’ve had in mining investment, may well persist even though economic orthodoxy would predict their lessening.

We cannot control a number of factors that have kept our dollar strong: like the weakness in the global economy, the close-to-zero interest rates of many nations and the increasing view that Australia is something of a safe haven.

Where we can make a difference is to other factors that matter for competitiveness and economic diversity.

So we can and must focus on increasing skills, building a national culture of innovation, rolling out the national broadband network, investing in infrastructure, improving regulation and leveraging our proximity to and knowledge of a rising Asia into a competitive advantage.

These are the five pillars this Government has identified as key to increasing jobs, prosperity and productivity.

We can also make a difference to the diversity of our economy through industry-specific plans.

I am determined that we will always do everything to support jobs and growth in our nation, to give individuals and families the best chance to build a life and get ahead.

Conventional economic forecasts are also being severely tested by the persistence of relatively low government revenue.

What we know for a fact is this: in Australia, revenue to government for every unit of GDP has been at its lowest since the recession of the early 1990s.

In other words, for a given amount of economic income generated, less money is finishing in the public purse, to be used for the Australian people.

We are experiencing a proportional reduction in the amount of revenue being generated from any given amount of economic income.

This is part of a trend which is felt worldwide.

Now, the immediate effect of this was made clear by the Deputy Prime Minister last December.

While within our medium-term fiscal strategy, spending is tightly constrained, the amount of tax collected from all sources - particularly from company tax - is significantly lower than independent forecasters or the Treasury have anticipated.

Compared to the public revenue which was forecast on the eve of the global financial crisis in 2008, what has actually been collected in tax since is far lower - on average, lower by more than thirty billion dollars every year.

Even compared to what was forecast once the worst of the global financial crisis had passed, annual revenue is tens of billions of dollars below what was expected.

There are domestic and global factors at work.

The domestic factors include our nation being in the investment phase of the mining boom, not its peak production phase; the new savings and consumption approach of families; the slowdown in capital gains; and the lack of profitability of many firms in trade exposed areas due to the high dollar.

Some of these factors are cyclical, some will be longer lived.

A number of these have their sources in global events and there are other global factors at work.

For instance, we see more genuine competitive movement of capital and of profit centres to seek the highest private returns than there has ever been; although, as the Assistant Treasurer has noted, some of the movement does look like it is about movement of the accounting of capital and profit.

This is an area where the G20, which Australia will chair next year, can and should find a fruitful agenda and we will be using our special status to get this done.

With pressure on revenue, it is the wrong time to be spending without outlining long-term savings strategies which show what will be foregone in order to fund the new expenditure.

Put another way, we are in an era when new structural calls on the Budget need to be associated with new structural savings.

This is the approach the Government will take as we make sure every child gets a great education and every Australian can live with the greater peace of mind that comes with knowing that if they or someone in their family become profoundly disabled they will get a fair chance and a fair deal.

I am determined that every child in this country gets the chance at life that can only come if he or she gets a world class education. I believe in this as a moral cause - a crusade - but I also believe that our future prosperity is inextricably linked to us winning the education race.

I will fight to get this done.

At the same time, as modern medicine saves the lives of more people who in earlier ages would have died, our modern nation must be able to provide those who then live with disabilities with decency and respect.

I will fight to get this done.

As we build a future of jobs, opportunity, fairness, I am determined to support modern families as they cope with the pressure of modern life.

Indeed we can’t be at our strongest as a nation unless we help families be at their strongest.

Australians, overwhelmingly, are people who work hard and show personal responsibility.

They want government to work with them as they live their modern, busy, pressurised lives.

Whether it is dads wanting paid parental leave to spend time with their new child, teenagers being supported to stay on at school, steps to counter the scourge of cyber bullying, women wanting a Government that understands their lives and respects their choices, older Australians wanting dignity and real choices about their care, or communities asking for new approaches to community safety, I will always be determined to modernise government to better meet those needs.

Spreading jobs, opportunity, fairness.

Helping modern families with modern pressures.

Delivering security and certainty for the nation.

This is the work of government. This is the work of 2013.

First: in coming weeks, the Government will release our Industry and Innovation Statement.

The Statement will lay out our plan to secure jobs in Australia.

It also forms our response to last year’s report of my Taskforce on Manufacturing.

Backing Australian firms to win work at home, win business abroad, and create new jobs and growth, above all through co-operative innovation, through firms and employees, researchers and governments all working smarter together.

Second: In the lead up to and in the Budget we will announce substantial new structural savings that will maintain the sustainability of the Budget and make room for key Labor priorities.

Our record of cutting wasteful programs, in line with our Labor values and purpose, is already strong.

The dependent spouse tax offset, the tax breaks for golden handshakes, tax concessions on super for high income earners, the millionaires’ dental scheme and fringe benefits loopholes for executives living away from home all gone.

The private health insurance rebate is means-tested: something many said could never be achieved.

This year we will make the tough, necessary decisions to ensure our medium-term fiscal strategy is delivered, and our centrepiece plans for Australian children and Australians with disability are funded, in this new low-revenue environment.

Third: I will put to April’s Council of Australian Governments the critical decisions to implement the National Plan for School Improvement: quality teaching and learning, power for principals, new transparency on results and in return, the future funding arrangements which will meet the needs of every student.

Across all our schools, over more than a decade, we have been slipping behind the education standards of the region and the world.

Changing that is the crusade which defines this term of my Prime Ministership.

Then in May, the Budget will set the fiscal and economic course for the coming four years and beyond.

Strong modern families can only thrive in a strong modern economy. Fairness can only be funded through economic strength.

On 1 July, we launch the National Disability Insurance Scheme.

The National Disability Insurance Scheme Launch Transition Agency will be operating the first stage of the scheme in five locations around the nation.

Like Medicare and universal superannuation, a smart policy to make us a fairer nation; like fair pay and the aged pension, a model of Labor’s vision for Australian society.

This is the plan for 2013.

A plan to govern.

A plan to deliver for modern families.

A plan for certainty and security.

A plan to take the right decisions now to build a stronger, fairer and smarter future.

A future of shared opportunity, where those given the hardest starts in life can still rise to the greatest heights and those who work hard can still get ahead.

A future where risk is shared as well, where those hit with life’s cruellest blows get the help they need.

A future in which our nation puts aside yesterday’s squabbles and unites to share the work of today.

In a world of many risks, our future is not assured.

Time is not for wasting.

And so, decisions have to be made about how we use our time this year.

We must get on with the business of governing and an election must be held.

In that order.

Governing first, electioneering second.

In 2012, the patience of Australians was tried by months of boiling hot political debate, with most of it - somewhat ironically - about global warming.

In 2013, I am determined their patience is not tried again. That policies and plans are at the centre of our national discourse.

The principal concern of Australians isn’t what a day in 2013 means for the politics or timing of the election campaign, but what it means for the life of the nation.

What does it mean for their job, their family, their future?

Not everything about the tenor and temperature of debate this year is in my control.

But I can act to clear away the carry-on that comes with speculation about when the election will be held.

And I can act to create an environment in which the nation’s eyes are more easily focussed on the policies not the petty politics.

I can act so Australia’s Parliament and Government serves their full three-year term and it is clear and certain when the election will be held.

So I today announce that later this year, I will advise the Governor-General to dissolve the House of Representatives with writs to be issued on Monday the 12th of August for an election for the House and half of the Senate, to be held on Saturday the 14th of September.

I do not do so to start the nation’s longest election campaign. Quite the opposite, it should be clear to all which are the days of governing and which are the days of campaigning.

Announcing the election date now enables individuals and business, investors and consumers, to plan their year.

But the benefit of fixing the date now is not just the end of speculation about election timing.

It gives shape and order to the year and enables it to be one not of fevered campaigning, but of cool and reasoned deliberation.

Not a year without passion, because elections are the time in our national life when values should contend, when alternate plans can be compared and considered.

No surprises also means no excuses.

Australians aren’t interested in campaigns without content, platitudes devoid of purpose.

There is now clearly the time and certainty necessary for the people and parties contesting the election to lay out their fully detailed, costed plans for the timely consideration of voters.

There’s plenty for this Government to be getting on with - plenty of work to do for our nation.

I will devote the days of governing to that work and then, at the time now fixed, to asking the Australian people to endorse my plan to keep building a strong, fair, smart nation.

I’m looking forward to all of it, and I look forward to your questions about it all.


Transcript of Question & Answer Session


Prime Minister

National Press Club, Canberra

JOURNALIST: I have to ditch my first question now. We've had another summer of natural disasters. Have you got a sense yet of what impact that will have on your budget?

And despite the higher level of household savings that you mentioned, there’s a large incidence of underinsurance by Australian households. Are you concerned about that and is there anything your Government can do to address it?

PM: The answers in turn is, no we don’t have a cost estimate yet.

What we know about flood waters is you can’t cost and see the damage until the floodwaters subside, until they go away and you can see what's left underneath.

That was our experience when we last saw devastating floods in Queensland. That will be our experience in these floods.

So the costing will take some time and we'll work with the State Government to assess damage and to make appropriate arrangements to rebuild Queensland and other parts of the nation that have been hit by natural disasters in the last few weeks.

And we've still got the worst of the fire season to come so there are still potentially some difficult days ahead.

On insurance, it does concern me if people are underinsured. We've worked with the insurance industry to clarify definitions, to try and get out of the system some of the things that drive people most crazy about their insurance policy; that they think they're covered and when they get it out they're not, so we’ve worked on that.

But my message is always to people that they should be appropriately insured. We do work to support people at times of natural disaster, but government will never be able to be wholly there to substitute for the benefits of appropriate insurance.

MODERATOR: In terms of local government underinsurance Prime Minister, do you have a particular concern about that, councils themselves?

PM: We had a good look at this following the 2011 natural disasters and I think some good work was done to talk about insurance and who needs to be insured.

Also to talk about some of the facts about premiums that would come with some of our big infrastructure assets, which actually wouldn’t make it worthwhile.

So I think we’re better informed than we were.

But the extent that anybody is underinsured, whether that’s a household, a business or a government instrumentality, then that’s something that they need to direct their attention to.

Government can assist, will be there, we always will. But we cannot substitute for appropriate prudential arrangements.

JOURNALIST: As we come into the third year of minority government, it would seem - based on observations of a number of factors - that Australians hold our political process in some sort of contempt. Hold our Parliament in some sort of contempt, if not dismay.

What can you do to restore confidence, to restore the electorate’s confidence in our parliamentary institutions, and do you accept any blame for the toxicity of our political debate. Tony Abbott, your opponent today is promising to reform parliament. Should this be part of your agenda as well?

PM: Minister Albanese has dealt with the announcement made by his opposite number Christopher Pyne, so I won’t bother to deal with that.

On the topic overall, I think Australians want to see stability, they want to see certainty, they want to see you getting down to the work, they want to see you’ve got a plan for the future.

That’s what I’ve outlined today, that’s what’s driven us during this period of government. And that’s what will be presented by me to the electorate when it comes time for electioneering, and I’ve outlined the date for you today.

In terms of the atmosphere of politics, this in my view has been a difficulty since the days of the last election because there was a strategic decision taken by the Opposition that it was in their interest to maximise the appearance of chaos and all the rest of it in Parliament.

Here we stand a few years later in election year with the Parliament going to election on the normal date. That tactic has been a spectacular failure and I hope it would therefore dissuade people from pursuing it in the future.

JOURNALIST: The Government said it’s unlikely to deliver its promised surplus because of the falloff in taxation revenue, which you mentioned during your speech. Will the deterioration in the budget bottom line be solely due to that falloff in tax revenue? Will all your new spending between now and September 14 be fully offset, not just your big signature policies, but all policies?

And also given that Labor in opposition didn’t release its full costings until the election campaign, isn’t it reasonable for Tony Abbott to do likewise, and if you don’t think so, why not?

PM: Okay, happy to take those questions too. We are sticking to our medium-term fiscal strategy, which means that we are offsetting spending with savings across the forward estimates for our major new structural expenditures like the work we need to do in schools, and the work we need to do for Australians with disability.

You will see the long-term savings strategy to match those expenditures, or to support those expenditures, so as I said in the speech, structural spending needs to be associated with structural saves.

What you will see in the Budget and what the Treasurer made clear at the end of last year, is that we’ve seen revenue downgrades happen again. I’ve explained in the speech how they are in breach of the economic orthodoxies that have been around.

We are not offsetting those revenue downgrades and we are not offsetting the operation of the automatic stabilisers.

On costings, I do believe that particularly having made an $11 billion error last time, it is incumbent upon the Opposition to put forward detailed costings this time.

They have two things that an Opposition has never had before to enable them to do that.

One, they’ve got the benefit of a fixed election date now, with several months’ notice. Two, because of what we’ve done with the Parliamentary Budget Office, they’ve got more resources available to them than an Opposition has ever had before in the history of our nation to produce proper costings.

I think people are entitled to conclude if they can’t produce costings with that level of resources over a time period of months that is because they either can’t do it or they deliberately don’t want to do it because they don’t want you to know the truth.

JOURNALIST: Just following on from Lenore’s question, I’m just wondering if you’re going to commit to a surplus in the next term of Parliament if Labor’s elected.

And secondly I’m also very interested about September 14. How did you come up with the date, who did you consult, did you tell Cabinet you were going to do this last night? Could you just explain how we came to September 14?

PM: The well-known fascination with a good process story. When served up with a big outcome story there’s always something to write, but if you need the process story to go with it, the process story is this.

I have always said that the Parliament would serve full-term, always said it. I’ve said it in the days that the hysteria about the life of this Parliament was at its maximum effect. Said it in those days because it was right then, I’m saying it now because it’s right now. And I’ve given you the date. So Parliament going full-term.

If you have the opinion that Parliament ought to go full-term - and I always have - then there’s only a limited number of dates on which the election could be held.

I reflected on this over the summer and thought that it’s not right for Australians to be forced into a guessing game, and it’s not right for Australians to not face this year with certainty and stability.

So in the interests of certainty, in the interests of transparency, in the interests of good governance I’ve made the date clear today.

What it means is people can make their plans. It means they can look at the Government and know very clearly which are the days of governing and which are the days of campaigning.

Other participants in the political process don’t have to worry about surprises, they can be very clear too about when they will outline their fully detailed, fully costed plans.

I consulted with the Deputy Prime Minister and a few senior colleagues. I discussed with them the decision I’d come to over the summer and I’m announcing it today.

MODERATOR: I think there was a first part to your question, I was so taken with your second part that I’ve forgotten what it was.

JOURNALIST: Just interested in whether you’ll commit to a surplus in the next term.

PM: We’re not delivering the May Budget for you as well today, Sid. You’ll have to wait.

JOURNALIST: I sense, it’s probably early, but I sense a collective sigh of relief across the nation today, your announcement, for the business community and journalists and people in general.

PM: I couldn’t take another month of Kieran Gilbert standing out in the rain and the cold, it’s too much.

JOURNALIST: Given what you’ve done do you think there’s a case just to move to fixed terms in this country for the very reason you’ve just outlined, why you’ve done what you’ve done?

PM: I think there will probably be a debate about that because of the decision I’ve announced today. But I’m really not going to be distracted myself by that debate.

I took a decision about this year. I took a decision about this election. I’ve always been crystal clear that we were going to go full-term and it seemed to me the right thing to do.

If I settled on a strategy and settled on a date to make it transparent to the Australian people it seemed to me the right thing to do in the interests of good governance to be clear about what days people could look to their Government for the days in which we’ll be acting as a Government and the days in which we will be in the campaign period.

And I thought it was good to give people certainty, so I have.

JOURNALIST: In your speech you outlined some of the concerns of Australians, and I note that some of them are things like travel time to work and community safety when you gave statistics saying that we’re actually safer than a lot of other places, and seemed to be suggesting that these are not well-founded fears.

Are there some things that governments just cannot address for Australians? Would you acknowledge it’s just not all about the money that there are some sentiments and some things that you just can’t fix.

And secondly, going back to yesterday, and you’re departing Senator in the Northern Territory, Trish Crossin. She has called for the Federal Government to compensate the Stolen Generation’s members in the

Northern Territory as has been done in the states around Australia. Will you do that, if not why not, is it because you can’t afford it?

PM: Well I’ll take the second question first. Trish Crossin over I think more than two years now has pursued this idea, policy idea of hers about having a compensation arrangement for members of the Stolen Generations in the Northern Territory.

It’s something she is in discussions about with Jenny Macklin. I’m not in a position to give you an outcome to those discussions today, but I do very much respect that it’s something that Trish has worked long and hard on and is very dear to her heart.

In terms of your first question, just remind me?

MODERATOR: All things, can you really do all things for all Australians.

PM: Okay, no of course government can’t do all things for all Australians. We don’t try to, and we never would.

People want to get about their lives getting the benefits of their hard work, getting the benefits of the responsibility they show in their own lives, building their own lives, having their own love affairs, making their own matches, nurturing their own families, all of the things that go to make up a life. Of course they want to do that.

But they have got a legitimate expectation that government has got a plan for the future, it’s a plan which means there will be opportunities available to them to be seized. That they can look forward to the opportunity for their first job, or a better job, or the opportunity to open a small business.

That they can look at their kids and know that they will be in a nation that can offer them the best of those opportunities too; a good job, a better job over the course of their life.

That's what we are seeking to achieve through the work we're doing to build our economy robustly enough for the challenges of the future.

And people want to know that there is some sharing of risk, that if the worst happened to you, someone would be there to assist you.

People don't ask to have a child born with cerebral palsy. They don't ask to be the person that got Parkinson's disease. They don't ask to be the mother of the teenage boy who didn't think about all the risks and dived off that pier and came up with an acquired brain injury.

No-one asks for that. And I think as a nation, there are times in which we should share risk.

Labor, through its history, has been the party that has created the opportunities of the future, the opportunities to get ahead. And we're party that has better shared risk.

People used to go to bankruptcy court because they couldn't pay their medical bills. Labor fixed that with Medibank, and then Medicare. That's what I mean about the sharing of risk.

And those things, properly construed, give you more ability to shape and structure your own life than you would have had if government hadn't acted. It is an empowering thing to put people in a world of opportunity. It is a comforting thing to know that if you fell, someone, government, would be there to help you.

JOURNALIST: Could I please clarify, did you negotiate or discuss the election date with Rob Oakeshott, Tony Windsor and the Greens as your agreement said that you would, so was there conversations with them before the announcement?

And you've talked today about good governance and being clear with the people and calling on the Opposition to show their costings. Can you please update your costings, the Treasurer announced before Christmas that the surplus was now unlikely. So can you tell the people watching this broadcast what size deficit for this year they should be preparing for given there's a bit of speculation it could be in the order of up to $10 billion?

PM: On the surplus/deficit issues, on all aspects of government accounting, you will see the May Budget and you will see the most up-to-date figures and then the pre-election fiscal outlook will be delivered during the campaign.

There will be no mysteries, no surprises, you will be able to read every figure. And I can certainly say on behalf of the Government you will be able to read our costings of the policies we're implementing as a Government and that we put forward for the consideration of the Australian people.

They can be there, they should be there, and from us, they will be there.

In terms of others in the Parliament, I did speak by telephone to Mr Windsor and to Mr Oakeshott and advise them of the decision I'd made.

JOURNALIST: You mentioned in your speech new opportunities and respect coming to Australia now that we're on the UN Security Council. Yet quite recently the UN's refugee agency has condemned the Government over the treatment of asylum seekers. I'm just wondering just how you reconcile those and if there's any sort of cause of embarrassment for Government that we're actually on the Security Council yet being quite severely criticised by the UNHCR?

PM: Absolutely not. No, none. I don't think there's any difficulty reconciling them. They're not inconsistent.

We are founding members of the United Nations. We are people at the United Nations held in high regard. We would not have been successful in a ballot for the United Nations Security Council if that were not so.

We fought a hard campaign, and won through because people do respect our nation around the world, its efforts in peacekeeping, in peace-building, what we achieved through our aid program.

And we've got a proud track record of welcoming refugees into this country. And will continue to do so.

The arrangements we make as a nation state about dealing with unauthorised arrivals and the assessment of people's refugee claims are a matter for us. And we need to make the right decisions, honouring always our obligations under the Refugee Convention, and we do.

Now, in terms of criticism from any instrumentality of the United Nations, one of the reasons we have the United Nations is so it can raise issues, spark debate, have consideration, whether that's the women's agency or Helen Clark running the development agency or whoever else. That's a good thing in terms of the democratic fabrics of nations around the world.

But I don't accept criticism of our approaches to asylum seeker and refugee issues. We've got a lot to be proud of and I don't think anybody can maintain that we are somehow viewed badly around the world because of those things, how do you square that up with having been elected on the Security Council?

JOURNALIST: You've talked again about the pressures on revenue. Do you have any plans to revisit the MRRT? There's a lot of initiatives tied to the MRRT. If you're not going to re-examine it, how are you going to pay for them given that revenues are a shadow of what was forecast? And do you regret tying so much to the MRRT revenue given that it was always going to be volatile?

PM: Well you don't solve problems by misdiagnosing cause and effect. And the way in which we've seen revenues fall as a unit of GDP is not about the MRRT and no-one should mistake it as being about the MRRT.

The huge write-downs have been in company tax and we've also seen a lessening of capital gains. The huge write-downs are in company tax.

There's this fashionable commentary that somehow there's lots of revenue that's flowing in from mining at this stage, including through company tax. Because we're in the investment phase of the boom this is not the phase of the boom where people pay a lot of company tax.

They pay company tax when they've done the investment; they've started pulling the oil or the gas or whatever it is out of the ground and selling it and making a profit on the transaction.

The MRRT, we always understood, would be a tax with movement in it. It is deliberately calibrated as a profits-based tax because that's the most efficient way of doing it.

JOURNALIST: Tony Abbott has promised that he'd introduce no adverse changes to superannuation during a first term of a coalition government. Do you care to match that promise or do you think it's an irresponsible pledge?

And secondly, is media policy still on your agenda and if so, will you introduce a public interest test during those months of governing?

PM: There's a difference between a policy and a platitude. In order to convince people that the Opposition has got a policy for superannuation, then they would need to produce a fully detailed, fully costed plan which shows how they will integrate it into the government's budget.

If they're unable to do that then it's a platitude, not a policy.

So if the Opposition produces a policy in that regard, I will respond to it at that time, and I won't be holding my breath for the time in between.

On the question of media policy, we are still considering the government's policies and plans following the various reviews that Minister Conroy initiated; the convergence review, the Finkelstein review and the like. And once again when we've got something to say in that area, then we will.

JOURNALIST: A couple of questions. You mentioned PEFO, the Pre-Election Fiscal Outlook. That's usually released about ten days into the campaign. Usually oppositions wait for that until they start releasing their own costings.

Given you have given Treasury a bit of advance notice in the election day, can PEFO be released earlier than this in the campaign, perhaps the first day? Particularly because more and more people are voting early too.

And secondly you mentioned aged care early in your speech, but there was no further mention of it. You've released a plan, but we haven't seen any legislation, when will we see aged care reform legislated and operating?

PM: We've certainly outlined comprehensive changes to aged care which we're committed to, and will do all the things necessary to make sure that they are put into effect. So yes, what Minister Butler has said to the Australian people is the plan that we intend to enact.

On PEFO, I'm not in a position to tell you what conclusion Treasury may or may not come to having heard this speech. But I don't think you should talk yourself or anybody else into the position that people need to wait for PEFO.

There will be the May Budget. There will be an election on 14 September. May budget, 14 September. It is a limited amount of time for any forecasting or revenue matters to change. A very limited amount of time.

So in those circumstances, in receipt of the budget figures, then there's absolutely no impediment on anyone contending for the election putting out fully costed policies and plans.

And I would note too, given a number of things that seem to be referred to in this platitude sense are expenditure commitments, there's absolutely no embargo right now on costing them and then outlining where the revenue source would be.

That doesn't need you to know the full sweep of the budget bottom line, or to have the full May Budget details sitting on your table. If you've come up with a policy that costs a billion dollars then you look at other expenditures in the Budget and you find a billion dollars.

If you can't cost it then there are people who can help you. If you can't find it then you are not going to get it done. If you don’t want to tell people where that's coming from, why don’t you want to tell people where that's coming from?

JOURNALIST: You've given away what's normally regarded one of the advantages of having your job by revealing to us all when the election will be. Do you think we should have fixed terms federally and also some have pointed out online September 14 is Yom Kippur, the holiest day of the year for Jewish people. Was that a factor in your thinking at all?

PM: There are only a limited number of days because of international events where we continue to need Australia to be represented. It's only a limited number of days because of things like football finals. So I do understand the significance of the day in question for the Jewish community.

But there would be many of my Melbourne Jewish friends who would also understand the significance of AFL grand final day. So there are only so many days and so many selections.

As people are aware, there's more pre-poll and early voting now than there has ever been before. And so people who face a reason, anything that means it's not convenient or proper for them to vote on election day, can make alternate arrangements and have their voices heard.

On my thinking, my decision is about election day 2013. And I've made it. So I've exercised traditional prime ministerial prerogative. I've just done it in an unusual fashion and taken everybody into my confidence at a far earlier stage than is done, and I'm pleased to be able to do so.

I think it gives certainty and shape to the year that Australians having lived through last year are entitled to.

In terms of fixed terms as a standing feature of how we do federal elections, I think there will be a debate. I wasn't making a policy decision about that for the long term. And for me, it's not the uppermost policy matter on my mind.

I'm very focused on jobs, opportunity, fairness, on getting done the big things that will shape this nation for the future so that's where I will be putting my energies.

MODERATOR: The Prime Minister has indicated she can go beyond our normal finishing time, at least to some extent so I would ask each of those remaining journalists to keep their questions reasonably short.

JOURNALIST: Obviously an optimist, do you think the Bulldogs will go straight through to the preliminary final in September, but I’d like to ask given the recent events in the Northern Territory, do you plan to intervene in the preselection to replace Robert McClelland and if so, who do you favour to replace him? And what will be your lasting memory or tribute to Robert McClelland and his career?

PM: Well, on football and the Bulldogs, I've given you the election date. I can't give you the Grand Final winner. Though I must admit I have done pretty well with my tips in the last few years but I need to get closer to the Grand Final to make sure I have got my tip right.

For AFL devotees, the weekend, the Saturday I've selected, obviously there are semi-finals being played.

I don't know what the AFL has got planned this year but over the last few years they’ve made that a Friday night game and a Saturday night game so you're still in a position to get out there, do how-to-votes for several hours and still get to the footy. So there that's no cause for alarm amongst people of Melbourne or anywhere else around the nation.

One of the things that the Deputy Prime Minister and I canvassed was the implications for NRL as well and I think Swanny's satisfied we haven't done any damage there. So that's the election timing and the footy.

On Robert McClelland. Robert McClelland has been a terrific local member. He cares a great deal about his community. I know that from my many discussions with him.

He has been a good contributor to the Labor team over a long period of time. Both in opposition as a shadow minister and then as a minister in the Government, including in my cabinet and did a terrific job.

So he will go to another phase of his life, he's someone who's very dedicated to family; his wife Michelle and the kids, and I'm sure they're looking forward to the next stage of the life of the McClelland family, without some of the stresses and strains that come with this life.

In terms of who will be preselected for that seat, when I announced that I intended to secure the preselection of Nova Peris for the Northern Territory senate spot, I indicated then I am a respecter of party processes. I was not going to make it a usual feature of how I did my work as Prime Minister.

So for that electorate, normal party processes will apply, including normal preselection processes for the New South Wales branch.

JOURNALIST: Do you favour anyone?

PM: If normal preselection processes are applying then it’s not for me to put the tip in.

JOURNALIST: Following your captain’s pick of Nova Peris which is forcing Trish Crossin out of the Senate against her will, the Opposition has again seized on the issue of trust.

Do you believe or do you accept that you do have an issue when it comes to trust out in the community, out in the electorate, and if so, can you fix that between now and 14 September?

PM: Well I think there comes a time in federal politics when we’ve got to speak a fair bit more frankly about these questions.

I am not the only Prime Minister or political leader who has decided that somebody’s of such merit that they ought to be preselected. It’s been done in the past by Labor leaders, I am sure if you scour the history books you will see that it’s been done in the past by Liberal leaders.

I believed on this occasion for the nation that it was important that an Australian of the standing and significance of Nova Peris presented for election for our party and that she, the electors of the NT willing, was the first indigenous woman to come into the Australian parliament. I think that's an important thing.

On these issues of political conduct more generally, which the Opposition is fond to have a carry on about, as I understand my history, Mr Abbott is in his position because a ballot was held against a leader of the opposition, that is there was a contest against a leader. As I understand my political history, Mr Turnbull was there because he had a contest against Mr Nelson.

So I understand my political history, John Howard was there because of a number of contests and twists and turns with Mr Peacock. If this conduct is viewed as unsatisfactory in Australian life then we'd want to rewrite the history of the last 30 years and we'd want to cull down pretty far in our Parliament before anybody presented for election.

Now people mightn’t like some of the things that happen in politics. It's not for the faint hearted and I make some tough decisions. The decision I made about Trish Crossin was a tough decision. I've made some other pretty tough decisions in my life too.

You need, in this job, to be up to making the tough decisions. I'm happy to be judged by them.

And so I would say to people who are thinking about character questions, the one thing that they would see when they look at me is someone who has shown a capacity, even in the most difficult of times, to get things done.

And in the world in which we live that can throw up the unexpected and the hard around every corner, then I think maybe that's a merit in a political leader, not a deficit.

JOURNALIST: Our farmers are one of the sectors that are coming under increasing pressure because of the high Australian dollar and other financial factors that are quite immediate. This is not just a story about whinging farmers. There's actually some concerns, genuine concerns about ongoing viability.

Given those immediate circumstances what sort of vision can we see from the Labor Government for our agriculture sector and farmers, and do you regret closing down the live cattle trade in June 2011 and what sort of damage do you think that's done for Labor's cause in getting re-elected?

PM: Well, I'm happy to take both questions. Farmers face some extraordinary pressures. I've talked extensively in the speech about the pressures on our economic diversity coming from the high Australian dollar and those pressures impinge on farmers in a variety of ways.

Farmers are facing the consequences of climate change. Climate change is not a future tense proposition; we are living through climate change.

And people who have worked their land for year after year can often talk to you passionately, movingly, about the way in which their land has changed and things about how they go about making their land productive have needed to change as a result. So there's lots of pressures around.

But in our agricultural sector there are also some incredible opportunities and that is what we are focused on. On helping our farmers realise those incredible opportunities.

We live in the region of the world where people, as they become middle class in their hundreds and hundreds and hundreds of millions, we know because we've watched that happen with Asia's rise, that they will change their diet; that they will want more of the kind of food that we produce; that they want more protein, that they will want more meat; that they will want more dairy; that they will want more wine.

That they will want to eat and enjoy the kind of things that you and I like to eat and enjoy. This is a huge opportunity for Australian farmers and we've got to be ready and right to seize it.

It's about what we do overseas, it's about the productivity of on-farm, it's about working with the agricultural sector, it's about getting the export links right. All of these things are things we continue to work on with the agricultural sector and we'll continue to work through them, including with the food strategy that Minister Ludwig has been working on.

On the live cattle trade, I took what was not an easy decision, and I knew when we took it that it would cause heartache and dislocation from a major industry.

But my real concern, apart from the welfare of the animals involved, my real concern for the industry was if we didn't act then the Australian people would have effectively withdrawn the social licence of that industry and campaigns would have started in a way which meant that it could not be a continuing industry in our nation.

We live in a democracy. And if enough people get their campaigning up with sufficient force then they change markets, they change economics, they change the way that people do things. And if we did not, and people got their own views about that conduct and I've got my own view about some of that conduct too, but it's a reality.

And if we did not work so that Australians could be satisfied, or more satisfied than they were about the animal welfare standards, then I think that would have been a threat to the existence of the industry.

So it's a pretty tough call. You take the short term disruption and have an industry for the longer term, or do you try and tough it out and maybe not have the industry for the longer term?

Well on that call I thought the short-term disruption was better.

JOURNALIST: Prime Minister, congratulations on becoming the first Prime Minister in Australian history to announce a 225-day election campaign.

PM: It's most definitely not that, Sam.

JOURNALIST: But you've promised some nasty cuts in that speech, not a lot of detail of where they would be.

In terms of families planning their budget is the 50 per cent child care rebate safe? Would you look at reducing that for wealthier families or axing it? What about the baby bonus, have you gone as far as you can in terms of reducing that for a second child and means testing that also?

PM: Let me assure you, as I did in the speech, my purpose here is not to see the longest election campaign. Quite the reverse.

I know people are being treated to mini-campaigning and the like so people were already potentially having to settle in for a long campaign. That is the exact opposite of my perspective about fixing the date today.

I want to be clear with people. What they will see me do over the coming months is the work of government and that is because I said in the speech time is not for wasting.

We have got big things we need to do and I'm going to get them done and they will be submitted to the judgment of the Australian people now on a fixed time and people can outline what they think and why they think it on 14 September.

So for me this is about governing and getting the job done and that's what you will see me doing.

In terms of the rule-in-rule-out games, we've played this game before and I'm not going to play it, so I know inevitably now there will be stories which says PM refuses to rule out cuts to CCTR and baby bonus and all the rest of it and people get themselves into a bit of a frenzy and a bit of a carry on. Well knock yourselves out.

What you will see from us is those structural saves and you can judge them when you see them.

And perhaps rather than creating an atmosphere of could it be this or could it be that, why don't we take the approach we've now taken with the election campaign. You will know and you will be able to judge it from there.

MODERATOR: We'll conclude there. Thank you.