Jew World Order

CHRIS UHLMANN, PRESENTER: These are truly tumultuous times in federal politics. The past few weeks have seen the Government convulsed by scandals surrounding Craig Thomson, the Health Services Union and the Speaker, Peter Slipper. That renewed speculation over Julia Gillard’s leadership.

But as we’ll see shortly, there are ructions on the other side of the political divide as well. Victorian Liberals are at war amid wild claims that former Treasurer Peter Costello made a bid for a comeback. It’s the kind of distraction the Coalition is desperate to avoid as an embattled government stakes its future on last night’s budget, which it hopes will shore up its spiralling support and bring disenchanted voters back to the fold.

A short time ago I spoke to the Prime Minister in her Canberra office.

Julia Gillard, welcome

JULIA GILLARD, PRIME MINISTER: Thank you very much.

CHRIS UHLMANN: Do you think that people believe you when you say that you’re going to reach a small surplus by this time next year?

JULIA GILLARD: I think we’ve demonstrating in this budget the real determination to deliver a surplus. What we’ve done, Chris, in order to have a surplus of $1.5 billion in the next financial year is we’ve really had to swim strongly against the tide. When we delivered last year’s budget, there was around $10 billion more in revenue forecast for the next financial year, so $10 billion in revenue lost and we’ve still delivered a surplus. That’s how determined we have been to do it. And across the budget, across the four years of the budget period, we’re delivering $34 billion in savings, building on top of $100 billion we’ve delivered in the past. So, I ask people to look at the figures and see the determination we’ve brought to budgeting for a surplus and we will deliver it.

CHRIS UHLMANN: But the past gives some indication of the future and last year you estimated a budget that came in $22 billion more than you expected.

JULIA GILLARD: And there are a range of factors that explain what has happened in this financial year.

CHRIS UHLMANN: But it could happen in the coming financial year, couldn’t it?

JULIA GILLARD: Well, but let’s look at the factors before we just assume they could happen in the forthcoming financial year. A big factor of course has been this is the financial year in which we’ve had to make a lot of the arrangements for the recovery from what were the most expensive season of natural disasters the nation’s ever seen, the Queensland floods and cyclone and then the flooding in other states and parts of the country. So that had an impact on the budget. Some continued global turbulence had an impact on the budget. And yes, we did make some very big policy moves and we were very transparent at the time about the budget impact like carbon pricing.

CHRIS UHLMANN: Certainly, but the point is it’s only $1.5 billion and unexpected things happen every single year, so, why don’t you think they will happen next year? And are you determined that if they do, that you will continue to cut to make sure you get to that $1.5 billion?

JULIA GILLARD: Yes, we are determined to deliver a $1.5 billion surplus and our strength as to what we’re prepared to do to get the budget in the right shape is shown in these budget documents, not only in the figures that I’ve just described to you, but the fact that when you compare in this budget how much of the economy is going into tax, how much of it is going into government expenditure, we are at lows compared with the expenditure and taxation rates of governments past including, most particularly, the Howard Government.

CHRIS UHLMANN: If you have to break a series of old promises on aid, on Defence, on company tax, in order to make new ones, why should people believe any promise?

JULIA GILLARD: Well, I don’t think you’re correct to put all of those things in one basket and pretend that they are the same. On company tax, I wanted to deliver a company tax reduction through this Parliament. Of course I’m not able to do that because Mr Abbott and the Coalition have said they will vote against it. Part of their …

CHRIS UHLMANN: The Greens said they’d vote for part of it.

JULIA GILLARD: Well, part of their negative campaign. The Greens were opposed to part of it and if we’d accepted their proposition we would have had a different company tax rate for small businesses than bigger businesses, which is dreadful policy and we weren’t prepared to do it.

CHRIS UHLMANN: But why weren’t you prepared to at least put it to the test? Because of course you know these things can change. You got the carbon tax through, which much be harder than a one per cent increase in the company tax rate.

JULIA GILLARD: Chris, I think I’ve got a pretty good track record of being able to tell what’s going to happen in this Parliament. And you’re not suggesting to me, are you, that the Leader of the Opposition, Mr Abbott, was going to wake up one morning, spring out of bed and go, “I’m gonna vote for the company tax reduction today”?

CHRIS UHLMANN: No, but the Greens have said they’d support part of it and perhaps you could’ve gotten (inaudible).

JULIA GILLARD: I think – Chris, I don’t think you can suggest to me or your viewers that the Greens were gonna change their mind either. So the company tax was not going to go through the Parliament. I didn’t want that negativity from the Opposition to deny Australians the benefits of sharing in this resources boom. So we found a different way to do it through increasing family payments and making some benefits available to the poorest in our community, including people on Newstart. So that explains company tax. You’ve bundled that in with two other saves that have got different explanations.

CHRIS UHLMANN: And all of them were promises that you broke.

JULIA GILLARD: Well, Defence, a set of explanations about capability acquisitions …

CHRIS UHLMANN: But in 2007 – just to make it clear, in 2007 you promised that you would increase Defence spending three per cent every year over and above inflation until 2018. You are not going to do that.

JULIA GILLARD: But Chris, what you inviting me to do? To say that we can go and buy equipment around the world that isn’t available to sell to us now? Are we …

CHRIS UHLMANN: No. Are you keeping that central promise that you would increase Defence spending … ?

JULIA GILLARD: As we said on the day that we announced that we would have a new white paper that we would deal with budget questions for the future in the white paper that will be published next year. But I am going to take you up on describing all of this in the way that you have and putting it all together as if it’s the same. Company tax: couldn’t get it through the Parliament. Defence: there are a set of explanations about capabilities and when they are available for purchase.

CHRIS UHLMANN: But will you meet the 2007 pledge? Will you meet the 2007 pledge?

JULIA GILLARD: Well, I’ve just described to you what’s happened to Defence. I went through it in painstaking detail when I made the announcement with Stephen Smith. If you want to talk about Defence in detail, let’s do it. We’re in a circumstance where we want to buy …

CHRIS UHLMANN: No, I only want to talk about the one particular part: is are you going to go three per cent real until 2018?

JULIA GILLARD: I’ve just – I’ve just …

CHRIS UHLMANN: So that’s a yes, you are.

JULIA GILLARD: No, no, Chris, I’ve just said to you, and my answer was and it’s the same as what we announced when we announced the new Defence white paper next year, that we would deal with budget rules in that Defence white paper. Why is that? Well things have changed in our world since the publication of the last Defence white paper. At the time, the GFC was just starting. It was not possible for anybody to see what implications it would have for our nation or for the Defence budgets and postures of our allies. That’s one of the reasons we’ve brought a white paper forward a year earlier and we will analyse all of that in the white paper.

CHRIS UHLMANN: And on aid in your UN Security Council bid, and this is something you’ve talked about for some time, you say Australia’s aid program has doubled in the past five years and will double again by 2015. That was part of the Millennium pledge, a pledge you made to the world. And at the bottom of this document says, “Australia: we do what we say.” Are we doing what we say?

JULIA GILLARD: Well we’re gonna be increasing aid year on year. When you look in the budget papers, every year you see more money spent on aid.

CHRIS UHLMANN: Absolutely. But was that the pledge?

JULIA GILLARD: Well, we’re seeing more money spent on aid. We had to make a decision in this budget to get the budget to surplus. That’s right thing to do for our economy and it required some tough choices – not pretending any of them are easy. And in a budget where we were looking around the government expenditure for savings to deliver a surplus whilst responding to cost-of-living pressures for working families. We did take a decision that one save that was appropriate was a 12-month delay in reaching our Millennium Development Goals. What that means, Chris, is that every year of this budget more money is spent on overseas aid than the year before and it means that we who are the 10th best donors in the OECD will still continue our journey to being the sixth-best donors in the OECD. I think that’s a record our nation can be proud of.

CHRIS UHLMANN: But to some of those three things, on company tax, on aid and on Defence, you’re happy that people will look at all those things and take you at your word, that you are not breaking any of those promises?

JULIA GILLARD: I think people will follow the reasoning I’ve just described to you, Chris. I think people – people are smart. You know, Australians are really smart people. And they know there’s been a Global Financial Crisis. They’d expect that to have some implications. They may have heard President Obama talk about what he’s doing in Defence. They may also have heard President Obama talk about his pivot to our region. And they might think to themselves, “Well, that all seems to have implications for us. I wonder how the Government’s responding,” and bringing forward the white paper is how we’re responding. I think they’d look at this parliament and say, “Well, if you can’t get a piece of legislation through to share the benefits of the boom, is there another way to do it?,” and we found it. And I invite people to judge the overseas aid decision I made. I’m happy to stand by it. But judge it in the context that each and every year of this budget we will spend more on overseas aid than the year before.

CHRIS UHLMANN: Prime Minister, if the central criticism that you had of the Howard years what that they wasted the benefits of the boom by handing out cash in bonuses, why are you doing the same thing?

JULIA GILLARD: Well, you look at our budget and compare it with the budgets of the Howard Government. You particularly look at the amount that we are taxing as a percentage of GDP and the amount that we are spending as a percentage of GDP. When you look across this budget, we keep spending at less than 24 per cent of GDP. There hasn’t been that kind of restraint in a government’s budget since around 30 years ago. A run of four years with spending less than 24 per cent of GDP.

CHRIS UHLMANN: In handing out this money …

JULIA GILLARD: So do not, Chris, suggest that you can compare this budget to the days of the Howard Government when they were just handing out cash. That is not right and cannot be sustained on the figures.

CHRIS UHLMANN: But if one of the central criticisms of you is that you’re driving up the cost of living – you’ve just delivered a cost-of- living package. Doesn’t that confirm the criticism?

JULIA GILLARD: Well I really doesn’t follow your chain of reasoning. I presume you’ve succumbed to the Tony Abbott fear campaign.

CHRIS UHLMANN: It’s just a question, Prime Minister.

JULIA GILLARD: Well, you said in your question …

CHRIS UHLMANN: Well if there is nothing going on cost of living, why are giving people more money for cost of living?

JULIA GILLARD: No. Chris, you just said to me you are driving up the cost of living and I’m making the point to you to even put that in a question you must have succumbed …

CHRIS UHLMANN: No, I said: if the central tenet of the criticism of you is that you’re driving up the cost of living …

JULIA GILLARD: Right, well let me answer your question. Let me answer your question and let’s just be a little bit reasonable and little bit common sense about it. There’s been a huge fear campaign about carbon pricing. It’s affected the community mood. I understand that. People hear all these horror stories about what carbon pricing’s gonna mean. I understand that makes people anxious. But we are delivering assistance to families for carbon pricing. They’re not paying the price, businesses that generate a lot of carbon pollution are and millions of households’ll come out better off. Now, there’s that issue. Then there are the rest of cost-of-living pressures which are nothing to do with the Federal Government. So, fear campaign on carbon pricing, people coming out better off, many millions of them. Then what else makes up a family budget? Well, petrol does, the rest of the increases in electricity do, which aren’t anything to do with carbon pricing.

CHRIS UHLMANN: Some of them are to do renewable energy programs, though, aren’t they, which are other government decisions?

JULIA GILLARD: Well, and many of them to do with the polls and the wires and the distribution networks …

CHRIS UHLMANN: Certainly.

JULIA GILLARD: … and need for new investment. And then there’s the other cost that families face. So I think it’s right, Chris, at this time in our economy to say the economy’s strong, we can bring the budget to surplus and we will, but we can also help working families at this stage through things like the school kids’ bonus, and I’ve spent a section of the afternoon sitting in the Federal Parliament voting in divisions watching the Opposition try and deny working families that assistance.

CHRIS UHLMANN: OK. On the carbon price – did you set the price of the carbon – carbon price too high? Will be looking at that again?

JULIA GILLARD: Look, we set the carbon price based on assessments of where world pricing was and what was the appropriate price for our economy. You’d be referring to the volatility in the price in Europe. I’m not surprised that there’s volatility in the price in Europe. There’s volatility in all financial markets in Europe.

CHRIS UHLMANN: Just briefly, you won’t revisit that price?

JULIA GILLARD: No, carbon pricing is starting on 1st July as legislated.

CHRIS UHLMANN: At $23?

JULIA GILLARD: Correct.

CHRIS UHLMANN: So no chance that that’ll go down. Just on some other things: your support for former Labor MP Craig Thomson went on for a long time. Was your judgment wrong on that?

JULIA GILLARD: Look, Craig Thomson has consistently denied the allegations about him. On Monday what was made available to the world – we didn’t see it beforehand – what was made available to the world was Fair Work Australia’s conclusions in the inquiry in relation to matters involving Mr Thomson and others. It’s a very disturbing report and makes pretty disturbing reading. I don’t want to see a dollar of union money misused. Mr Thomson continues to deny the allegations. Ultimately, he’ll have his day in court and that’s the appropriate thing.

CHRIS UHLMANN: Was it an error of judgment to put Peter Slipper in the Speaker’s chair?

JULIA GILLARD: Well, I believe that Mr Slipper on his performance as Deputy Speaker had the skills to be Speaker of the House of Representatives and I actually haven’t heard criticism of his performance in keeping Question Time under control and those things that a speaker needs to do.

CHRIS UHLMANN: Had you heard criticism about his attitudes to entitlements over the course of 20 years?

JULIA GILLARD: Well, what the – the matter that is – well, let’s remember: this is a man that was preselected nine times by his political party.

CHRIS UHLMANN: Certainly. I thought you might have heard some of those things.

JULIA GILLARD: And the Leader of the Opposition, who Mr Slipper describes as a friend, was giving him character references up to I think it was September or October last year. So, Mr Slipper I knew in that context nine times supported by his political party. Certainly enjoying the support of his leader very recently before he became the Speaker. Now, of course, there are a set of questions there and they need to be worked through proper process.

CHRIS UHLMANN: Is a fit and proper person to be Speaker?

JULIA GILLARD: Oh, I am not going to act as judge and jury on matters where I am – I cannot have the facts. I mean, I’ve – how would you expect me to judge that? It would be grossly unfair for me to do so.

CHRIS UHLMANN: Alright. Prime Minister, we’ll have to leave it there. Thank you.

JULIA GILLARD: Thank you.